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show your work please In addition to the financial statement, you also know that: Tax rate = 40% Depreciation of 2008: 30,000 Capital structure expenditure
show your work please
In addition to the financial statement, you also know that:
Tax rate = 40%
Depreciation of 2008: 30,000
Capital structure expenditure of 2008 is 80,000
INt rate on firms debt is 6%
Target capital structure for debt to equity to the sum of short term and long term debt divided by total assets, the rest is in equity. A comparable firm with similar capital structure has a beta of 1.5 and a price of ebitda ratio of 15. The risk free rate is 1%. Market risk premium is 8% . also you can assume that the firm is going to grow at a constant rate of 2% after the forecast period. Given the analyst forecast that the firm is going to grow by 20% for the next 2 years what is the firms instrinsic equity value at the end of 2008 based on forecast using DCF approach?
hint - FIND THE TERMINAL value USING BOTH APPROACHES
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