Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Use the financials and assumptions below to answer these questions. For the valuation questions, use the given WACC For the WACC question, please calculate the

image text in transcribed
Use the financials and assumptions below to answer these questions. For the valuation questions, use the given WACC For the WACC question, please calculate the true WACC given the assumptions below. 1) What is the enterprise value using the discounted cash flow method (DCF)? 2) What is the intrinsic value of the share price using DCF? 3) Would you purchase the stock using using DCF? 4) What is the enterprise value using the dividend discount method (DOM)? 5) What is the intrinsic value of the share price using DDM? 6) Would you purchase the stock using using DDM? 7) What is the WACC using market rates for the equity, bonds, and preferred equity? Tignore the given WACC, calculate it Draft Kings Financials le. Year 1 2019 2020 Le Year 2 2023F 2022 Le Constant growth Normalized Year 2021 Sin Millions Revenue Revenue Growth $ 323 $ 43% 615 $ 1,065 $ 90% 73% 2,662 $ 150% 5,325 $ 100% 5,644 6% COGS Gross Profit Gross Profit Margin $ (104) $ $ 220 $ 68% (347) S (626) $ 268 $ 439 $ 44% 41% (1.198) 5 1,464 $ 55% (2,130) $ 3,195 $ 60% (1.975) 3,669 65% Corporate Expenses Sales and Marketing Expenses Research and Development Depreciation and Ammortization Total Operating Expenses $ (181) S (616) $ (907) S $ (185) $ (495) $ (595) $ 5 (56) $ (169) $ (200) $ $ (14) $ (77) $ (112) S $ (436) S (1,357) $ (1,814) 5 (950) S (1,000) $ (650) 5 (700) $ (100) $ (100) S (125) $ (150) 5 (1,825) $ (1,950) $ (1,050) (750) (50) (175) (2,025) $ (216) $ (1,089) $ (1,375) $ -67% -177% -129% (361) $ -14% 1,245 $ 23% 1,644 29% EBIT EBIT Margin Non Operating Expenses Net Income (659) s (10) S (10) (10) S $ (226) $ (1,099) $ (1,385) $ (10) 5 (371) S (257) 5 1,233 $ 1,629 $ $ $ 42 $ 5$ $ 0% 403 5 227 5 10 S $ 0% 403 150 $ (5) S $ O% 403 $ 100 $ 10$ $ 0% 403 $ 125 $ (5) 617 S 50% 403 153 $ 150 20 1,629 100% 403 4.04 10% 6% 303 Capital Expenditures (CAPEX) Change in Net Working Capital Dividends Dividend Payout % of Net Income Shares Outstanding Dividend per Share Assumptions for DCF/DDM WACC Constant Growth Shares Outstanding Current Share Price Total Debt Outstanding Preferred Equity Outstanding Stockholder Equity (Book Value) Cost of Capital Assumptions: Beta Risk Free Rate Market Risk Premium Preferred Dividend Yield Current Debt YTM Tax Rate $ 49 $ 200 $ 20 $ 2,700 18 1% 5.5% 8% 6% 40%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Finance questions