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Given the following information Assume that tax rate is 0.3, Year 2026 is the terminal year. After 2026, the firm's FCFF will grow at 5%
Given the following information Assume that tax rate is 0.3, Year 2026 is the terminal year. After 2026, the firm's FCFF will grow at 5% forever. Use the following information to find the discount rate fof the firm: Following is the information of a VC fund: - Expected return of the fund: 12% - Fund horizon: 10 - Fund initial size: 28 millions - Number of startups invested: 18 - Probability of success: 30% Assume that the fund invest in each firm with equal weight and if a firm fails the firm value will be 0 . The discount rate of the fiem is the required rate of return of each firm in the VC fund portfolio. What is the value of the firm? Hint: you need to calculate FCFF, and then use FCFF and the discount rote to compute the firm value. FCFF=EBIT(1Taxrate)+DepFCImvWCinv
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