Now is the second month of your internship at the investment bank. You are well trained in calculating FCF and you are now familiar with different valuation methods. You want to apply what you have learned to calculate the enterprise value of the firm called SoulBiking. SoulBiking is operating in the health and fitness space. Its closest competitor is SoulCycling, another indoor fitness club that provides membership classes.

You have applied the FCF formulas and calculated the following FCFs for SoulBiking: (units are all in $Million)

Year (nth)	1	2	3	4	5	6
Year	2018	2019	2020	2021	2022	2023
FCF	30	35	38	40	44	50

You assume that the free cash flows will grow at 3% from 2023 on. The cost of capital is assumed to be 7%.

Besides using the growth method and discounting future cash flows, you are also interested in using the multiples approach. SoulBikings EBIT in year 2017 and 2018 (forecast) are 20 and 140 respectively.

Heres some related information you gathered for SoulCycling:

SoulCycling data as of end of 2017
Market Cap	1200
Debt	300
Cash	100
Sales in 2017	800
EBIT in 2017	-10
EBIT in 2018 (forcast)	160

QUESTION BELOW:

Whats the enterprise value of SoulBiking in year 2017?

Hint: Use the growth method, decompose EV into two parts. You will need to calculate the present value of FCFs from year 1 5, as well as the discounted residual value.

Select the best answer from the following:

a.) 576.5

b.) 812.0

c.) 1042.75

d.) 1138.45

ALSO: What percentage of the EV computed in the previous question is contributed by the terminal value component?