1. Find the equity value for a company with the following information:

1. • Free cash flow in 2021 is expected to be $100,000
   • Free cash flow in 2022 is expected to be $105,000
   • Free cash flow in 2023 is expected to be $110,000
   • You are not given growth rates beyond 2023, so you plug in 2.4% which is what other companies tend to grow at
   • The companys WACC is 9.5%, and they have $0.5mm of debt
   • The company had 2020 earning of $400,000 and EBITDA of $700,000.
   • Similar companies are selling at P/E multiples of 12x and EV/EBITDA multiples of 8x.
   • What is the equity value using the free cash flow valuation method?
   • What are two equity valuations using other methods?
   • Which is the best method to use for valuation this case? Why?
   • Describe the situations in which you would prefer to use comparables and those situations when you would prefer to use FCF for valuing equity.