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please calculate the terminal value the information i have there is the only information i have available Kambala Technologies (ET), a South African surveillance and
please calculate the terminal value
the information i have there is the only information i have available
Kambala Technologies (ET), a South African surveillance and chip manufacturing firm, is being analysed to determine its enterprise value. You are part of the team of financial analysts working on the project. The team leader has compiled pertinent information and left you with the task of performing the final step in the process of determining the value of the company, namely a discounted cash flow analysis. "Kambala has a beta of 1.7 and a market risk premium of 5%. Money market instruments in South Africa are yielding 5.5% annually. The company has taken out two loans. The first loan amounts to R12,550,000 with interest payments of R1,004,000 per annum and the second loan amounts to R5,230,000 with an interest rate of 9%. In the current year, 20X0, Kambala purchases machinery and equipment for the production of chips to the value of R9,000,000. ET incurs depreciation costs of R3,950,125 per annum. In the Valuation tab, calculate Kambalas enterprise value, assuming an expected inflation rate of 4.5% for the foreseeable future and a tax rate of 28%. 20X2 20X3 20XO 20x1 300,250 DISCOUNTED FCFF Discounted FCFF Terminal value Discounted terminal value 35% 65% Equity allocation Debt allocation Market risk premium Expected market return Risk-free rate Beta After-tax cost of debt Cost of equity WACC Terminal FCFF growth rate Current implied DCF (Enterprise value) Free cash flow to firm (FCFF) EARNINGS AFTER TAX ADJUSTMENT 7,235,692 1,613,078 7,896,236 1,798,030 8,125,365 1,862,186 8,450,639 1,953,263 EBIT Tax adjustment Earnings after tax DEPRECIATION Depreciation of fixed assets CHANGE IN WORKING CAPITAL (188,500) (171,489) 87,500 (244,120) (55,040) (17,900) (10,856) (210,850) 23,500 117,500 (77,200) 47,500 (Increase\/decrease in inventories (Increase\/decrease in trade receivables Increase/(decrease in trade payables CAPITAL EXPENDITURE Fixed asset purchase Step by Step Solution
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