Assume that the Subject Company has achieved its stable revenue growth and EBITDA margin.

Show that the Capitalization of Income method gives the same result as Discounted Cash Flow analysis.

Provide calculations using both methods (multi-period DCF and Capitalization of Income).

Simplifying assumptions for Assignment #2:

1. Revenue in 2016 $5,000, revenue growth is 5% in all the years after that.
2. Operating Expenses = 90% of revenue in all the years (EBITDA margin = 10%)
3. Depreciation = 90% of capex in all the years.