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.

1. What is the equity value using the free cash flow valuation method?
2. What are two equity valuations using other methods?
3. Which is the best method to use for valuation this case? Why?
4. Describe the situations in which you would prefer to use comparables and those situations when you would prefer to use FCF for valuing equity.

Please show ALL your work in each part.