$30$ pts$,$ DCF Valuation

You are valuing a company as of December $31$st$,2022.$ The company has reported the following

figures for $2022.$ The company is expected to invest in new projects and grow at $10\%$ annually until

December $2027$ and then keep a terminal growth rate of $4\%.$ Currently comparable firms trade at

forward$-$looking TEV$/$FCF of $20.$

The company has an equity cost of capital of $11\%,$ a debt cost of capital of $6\%,$ and a tax rate of $22\%.$

Initial Debt$/$Enterprise value ratio is $0\mathrm{.}33.$ Use the multiple model for the terminal value.

a$)(2$pts$)$ Calculate WACC.

b$)(4$pts$)$ Project FCFs until $2027$ and report them.

c$)(6$pts$)$ Using WACC $=9\mathrm{.}5\%,$ calculate price per share as of December $31$st$,2022.$

d$)(2$pts$)$ What percentage of TEV is the terminal value?

e$)(2$pts$)$ Is it large or small percentage, relatively?

f$)(2$pts$)$ Calculate the current forward$-$looking TEV$/$FCF multiple.

g$)(2$pts$)$ Report at what premium or discount relative to comps you value the company today.

h$)(2$pts$)$ Give a reason why this company may trade at the discount$/$premium in the previous

sub$-$question.

i$)(2$pts$)$ Calculate the exit forward$-$looking TEV$/$FCF multiple.