Given the following information

Items\Year

2023

2024

2025

Terminal year (2026)

EBIT

19.43

22.69

29.72

39.74

Depreciation

0.23

0.56

0.75

0.98

FCInv

1.01

1.77

2.72

3.53

WCInv

1.14

2.71

3.57

4.59

Assume that tax rate is 0.3. Year 2026 is the terminal year. You use the following information to calculate the exist multiples (hint: it is the average number of the multiples of the three above firms).

Firm

Firm Value

FCFF

A

100

20

B

300

30

C

400

60

D

500

60

Use the following information to find the discount rate of the firm:

Following is the information of a VC fund:

Expected return of the fund: 15%

Fund horizon: 10

Fund initial size: 20 millions

Number of startups invested: 19

Probability of success: 40%

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 firm 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 calculate the terminal value using exit multiples.

FCFF = EBIT(1 Tax rate) + Dep FCInv WCInv.