Question
Free Cash Flow Valuation Income Statement (thousands of US$) t = 0 Sales $872.4 COGS $418.8 Gross Profit $453.6 SG&A $130.9 R&D $0.4 EBITDA $322.4
Free Cash Flow Valuation
Income Statement (thousands of US$)
| t = 0 | |||||
| Sales | $872.4 | ||||
| COGS | $418.8 | ||||
| Gross Profit | $453.6 | ||||
| SG&A | $130.9 | ||||
| R&D | $0.4 | ||||
| EBITDA | $322.4 | ||||
| Depreciation | $41.8 | ||||
| EBIT | $280.6 | ||||
| Taxes 30% | $84.17 | ||||
| Net Income | $196.4 | ||||
| FORECASTS | |||||
| 1 | 2 | 3 | 4 | 5 | |
| Sales | 25.0% | 25.0% | 25.0% | 10.0% | 10.0% |
| COGS | 48.0% | 47.5% | 47.0% | 46.5% | 46.0% |
| SG&A | 15.5% | 16.00% | 16.5% | 16.5% | 16.5% |
| R&D | 0.05% | 0.05% | 0.05% | 0.05% | 0.05% |
| Depreciation | 80.0% | 85.00% | 90.0% | 95.0% | 100.0% |
| Capital expenditures (% of Change in Sales) | 35.0% | 35.0% | 35.0% | 35.0% | 35.0% |
| Working capital investment (% of Change in Sales) | 25.0% | 25.0% | 25.0% | 25.0% | 25.0% |
| discount rate | 15% | ||||
| terminal g | 4% | ||||
A) Calculate the valuation of the business.
B) What fraction of the business should you be willing to give away in exchange for the funding of $1,000,000?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
A To calculate the valuation of the business using the free cash flow valuation method we first need ...
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Step: 2
Step: 3
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Fundamentals Of Corporate Finance
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
5th Edition
0135811600, 978-0135811603
