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 multiple of free cash flow as your estimate?
1.$155 M
2. $2,898.5 M
3. $3,007.0 M
4. $4,365.0 M
5. $7,042.2 M
6. None of the options are correct
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Property Finance
Authors: Giacomo Morri, Antonio Mazza
1st Edition
1118764404, 978-1118764404
