Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

For Company XYZ,,the projected cash flow components (in $mil) for the next five years are as follows. WACC is 10% and the growth rate is

image text in transcribed

For Company XYZ,,the projected cash flow components (in $mil) for the next five years are as follows. WACC is 10% and the growth rate is projected to be 6% for free cash flows during the horizon period after 2025. Using mid-year convention method, What is the PV of terminal value of XYZ company based on the EBITDA exit multiple, if the EBITDA exit multiple for 2025 is 15.0x ?

A.

72.28

B.

82.12

C.

79.12

D.

75.44

2021 2022 2023 2024 2025 EBIT 2.9 4.1 4.8 5.8 6.2 Depreciation 1.1 1.2 1.5 1.6 1.9 Tax 0.87 1.23 1.44 1.74 1.86 Net Capital Spending 0.5 0.8 1 1.2 2 Change in NWC 0.25 0.45 0.35 0.55 0.24

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Healthcare Finance An Introduction To Accounting And Financial Management

Authors: Louis C. Gapenski

4th Edition

1567932800, 978-1567932805

More Books

Students also viewed these Finance questions

Question

2. What does the other person defi ne as the beginning?

Answered: 1 week ago

Question

1. What do you defi ne as the start of interaction?

Answered: 1 week ago