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The company Netflyk is part of the S&P 500 index, most analysts have a goof feeling about investing in the company, and the prices have

The company Netflyk is part of the S&P 500 index, most analysts have a goof feeling about investing in the company, and the prices have been rising in the last weeks.

There is no doubt that the company has a good performance, but you want to make sure you are not paying a price above its value.

Debt value

10.000.000

Projected EBIT in one year

15.000.000

EBIT 5 year growth rate

10%

Perpetual growth rate in CF

3%

Net working capital percentage

10%

Capital spending percentage

12%

Depreciation percentage

10%

Shares outstanding

2.000.000

Tax rate

20%

The cost of Debt is 5%. The risk free rate is 3% and the market premium is 7%, the Beta is 1.5.

Which is the total value of the company, and how much is the maximum price per share that you should pay?

Please make your calculation by using DCF method and using the EBIDA Multiple, the applicable multiple for this company is 10.

Which method do you prefer and why?

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