Macbeth Company is a european mass media corporation that had been founded in 1970. Its activities include television channels, a playwriting unit, and cultural digital newspapers. After 50 years of successful activities that fueled a healthy growth rate it decided to go public in 2020 selling 10 million shares in an auction oversubscribed 9 times. As of February 2021 share price is trading at 30. Number of shares is 20 million. At this point, Macbeth wants to enter the social networks business and has set its eyes upon Globe. This social network is very popular amongst young users. Its income growth rate had been phenomenal at 20% per year. Estimated revenues for 2022 are 18 billion. The growth rate is expected to last for 5 years (starting in 2022) and then increasing competition is expected to gradually decrease this growth rate over another 5 years until it reaches the mature stage at which growth rate would be stable at 2%. The decrease is estimated to be linear.

Macbeth 2020 simplified Balance Sheet

Numbers in billion

	Assets
	Excess Cash	90			A/P	25
	A/R	30			Financial debt	10
Total Current Assets	120		Total short term liabilities	35
	L/T assets	315			Financial debt	28
	A/D	-15			Equity	357
Total L/T Assets	300
Total Assets		420		Total liabilities +OE	420

Your task is to estimate the value of Globe and then answer the below question.

Please do not use (1-t) when levering beta.

Please use two decimal places in Excel

Additional data:

• Macbeth unlevered beta 1.5
• Globe unlevered beta 0.8
• US 10 year bond yield 1.21%
• German 10 year bond yield 0.1%
• Tax rate 30%
• Risk Premium 6%
• Globe %D 25%
• Globe%E 75%

Note: Follows in the next page

• Macbeth kd 4%
• COGS 20% of income
• Expenses 5% of income
• Depreciation -15
• CAPEX -15
• Globe A/R 4
• Globe A/P 1

In Globe valuation, after calculating present value of FCFs (Enterprise value) what is the net adjustment to be made to arrive at the value of equity?