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Fair Share for Investment You have been asked by your old body from the University to help him with an evaluation of an investment project.

image text in transcribed Fair Share for Investment You have been asked by your old body from the University to help him with an evaluation of an investment project. Your body is considering making a SEK 100 million investment in WiZardIT AB, a young technology company, and you have been provided with the following forecasts of revenues and free cash flows to the firm. The investment should be in that the company issues new shares. At the end of year 3 , you expect the company to become a stable growth company, with year 3FCFF, growing 2% a year in perpetuity. Assuming that there the CoE in year 3 will apply in eternity and that is no debt or cash in the company. How much of the equity in the company should you demand as your fair share for the SEK 100 million investment? Estimate the value of equity today

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