Data for the question: https://www.thecasecentre.org/programmeAdmin/courses?id=1391075&pdid=46530&opid=872712

1)Estimate the value of Pinkerton's to Wathen. Use a discounted cash flow approach (not multiples). The case presents forecasts for the "expected" scenario as well as for a "pessimistic" scenario. Use the "expected" scenario to forecast expected cash flows. Assume that the cost of unlevered equity is 15%.

2)Suppose Wathen proceeds with the acquisition of Pinkerton's. Which financing alternative do you recommend?

Explain why and provide the necessary calculations to back up your recommendation.

Note: if your valuation for Pinkerton's is below $100 million, assume American Brands will lower the price. In other words, irrespective of your answer to question #1, address this question too.

My Question: Please show step by step how to conduct a dcf valuation for part 1. For part 2 please explain how to quantify the difference between the options.