$3.$ For the purchase of Twitter, assume that Musk borrows $$25$ billion and provides the remaining $$21$ billion in equity of his own and of investors $($total $$46$ billion to cover the $$44$ billion deal value and $$2$ billion closing costs$),$ and that equity holders $($including Musk himself$)$ require a return of $25$ per cent on their investment. Using the information provided $($see case Exhibit $6),$ calculate and discount residual $($i$.$e$.,$ levered$)$ cash flows to estimate Twitter$$s value under three scenarios. Assume a revenue growth of $15\%$ for the first $5$ years and $10\%$ for the $6$th year. The interest rate on debt is $7\%.$ The tax rate is $28\%$ and Musk reuired return is $25\%$

a$.$ Musk is able to achieve a best$-$case scenario, with an EBITDA margin of $25$ per cent, revenue growth of $15$ per cent for the first five years and $10$ per cent thereafter, and an exit EV$/$EBITDA multiple of $25.$

b$.$ Musk is only able to achieve a base$-$case scenario, with an EBITDA margin of $22\mathrm{.}5$ per cent, revenue growth of $12\mathrm{.}5$ per cent for the first five years and $10$ per cent thereafter, and an exit EV$/$EBITDA multiple of $22\mathrm{.}5.$

c$.$ Musk faces a worst$-$case scenario, with an EBITDA margin of $20$ per cent, revenue growth of $10$ per cent for the first five years and $8$ per cent thereafter, and an exit EV$/$EBITDA multiple of $20.$