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Can someone please tell me how this is done?! I'v also attached a file with two tabs. Given the following assumptions, estimate the value of

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Can someone please tell me how this is done?! I'v also attached a file with two tabs.

Given the following assumptions, estimate the value of the company. using a Discounted Cash Flow (DCF) analysis to assist in the price negotiations:

  • Debt free cash flow - Year 1: $500K
  • Debt free cash flow - Year 2: $750K
  • Debt free cash flow - Year 3: $1,200
  • Debt free cash flow - Year 4: $1,300
  • Debt free cash flow - Year 5: $1,400
  • Terminal value at end of Year 5: $13,200
  • Discount rate equal to WACC rate ? 15%
  • Interest bearing debt at valuation date - $500K
image text in transcribed Miley Manufacturing, Inc. Discounted Cash Flow (DCF) Analysis Instructions 1. Determine the value of Miley Manufacturing, Inc. by completing the DCF Tab in this spreadshe 2. A DCF Analysis is an Income Approach to valuation and is commonly used to value companies 3. Debt free cash flows and terminal value are given in the Case. The calculation for the termina 4. Note that, since the WACC rate (returns required for debt and equity) is being used as the req 5. Debt must be subtracted from the Enterprise Value to arrive at the Equity Value. "Business Va 6. You will have to find the correct present value factors for the 15% WACC rate. You can find the 7. The Total Equity Value is what you have determined the business is worth to begin price nego Company Discounted Cash Flow Analysis (in $000s) Debt Free Net Cash Flows Terminal Value Present Value Factor using WACC rate (1) Present Value of Debt Free Net Cash Flows Total Enterprise Value (Value of Debt & Equity - Sum of Present Values) Less: Interest Bearing Debt at Valuation Date Total Equity Value (Value of Business) (1) Note: use Year 5 present value factor for the Terminal Period present value factor 15.0% Year 1 25.0% Year 2 50.0% Forecast Year Year 3 60.0% Year 4 8.3% Year 5 7.7% Terminal Period 4.0% Terminal Value using Gordon Growth Model: Year 5 cash flow Sustainable growth rate Terminal period cash flow Capitalization rate (WACC rate less growth rate) Rounded $ 1,400 4% $ 1,456 11% $ 13,236 $ 13,200

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