Question
The following table presents forecasted financial and other information for Havasham Industries: 2015 2016 2017 Projected EBIT $ 317 $ 339 $ 363 Earnings after
The following table presents forecasted financial and other information for Havasham Industries:
| 2015 | 2016 | 2017 | |||||||
| Projected EBIT | $ | 317 | $ | 339 | $ | 363 | |||
| Earnings after tax | 197 | 210 | 225 | ||||||
| Free cash flow | 135 | 144 | 155 | ||||||
| Havasham's WACC | 8.2 | % | |||||||
| Expected growth rate in FCFs after 2017 | 4.0 | % | |||||||
| Warranted MV firm/FCF in 2017 | 19.4 | ||||||||
| Warranted P/E in 2017 | 18.7 | ||||||||
What is an appropriate estimate of Havashams terminal value as of the end of 2017 using a warranted price-to-earnings multiple as your estimate?
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Entrepreneurial Finance
Authors: J. Chris Leach, Ronald W. Melicher
6th edition
1305968352, 978-1337635653, 978-1305968356
