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PLEASE URGENT!!! You are supervising a young analyst trainee who is trying to put together a DCF for assessing the value of a mature packaging
PLEASE URGENT!!!
You are supervising a young analyst trainee who is trying to put together a DCF for assessing the value of a mature packaging company. Looking at her draft you notice several elements:
Sales growth for the first 5 years: | CAPEX per year: | Average yearly Change in Working Capital for the first 5 years: | TV is set as growing perpetuity. Growth rate used: | Rate used to discount all FCFF: 10-year risk-free rate |
14% | None | -3% | 9% | 1.5% |
a) List all inconsistencies you see in her assumptions.
b) How will those errors affect her value? Explain
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