Terminal value refers to the valuation attached to the end of the planning period; it captures the value of all subsequent cash flows. Estimate the value today for each of the following sets of future cash flow forecasts.

Dustin Electric Inc. is about to be acquired by the firms management from the firms founder for $15 million in cash. The purchase price will be financed with $10 million in notes that are to be repaid in $2 million increments over the next five years. At the end of this five-year period, the firm will have no remaining debt. The FCFs are expected to be $3 million a year for the next five years. Beginning in year 6, the FCFs are expected to grow at a rate of 2% per year into the indefinite future. If the unlevered cost of equity for Dustin is approximately 15% and the firms borrowing rate on the buyout debt is 10% (before taxes at a rate of 30%), what is your estimate of the value of the firm?

Please show formulas so I can re-create in Excel. Thanks!!!

Given
K-WACC (Cost of capital)	10.00%
growth rate in terminal cash flows	2.00%
Corporate tax rate	0.30
Cost of debt	0.10
Unlevered cost of equity	15.00%
Solution
	Year
	0	1	2	3	4	5	6+
FCF		$ 3,000,000.00	$ 3,000,000.00	$ 3,000,000.00	$ 3,000,000.00	$ 3,000,000.00	??
Debt	$10,000,000.00	??	??	??	??	??	??
Interest		??	??	??	??	??	??
Tax shields		??	??	??	??	??	??
After-tax interest		??	??	??	??	??	??
debt principal paid		??	??	??	??	??	??
Equity FCF		??	??	??	??	??	??
Valuing the unlevered cash flows
Planning period			??
Terminal value			??	??
Valuing the interest tax savings
Planning period			??
Terminal value			??	??
Enterprise Value = Value of the unlevered firm + Value of interest tax savings				??
Less: Debt (at time 0)				??
Equity Value				??