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You are an analyst valuing Palm and Sun Industries for a possible acquisition. Below are pro forma estimates of unlevered free cash flow and interest
You are an analyst valuing Palm and Sun Industries for a possible acquisition. Below are pro forma estimates of unlevered free cash flow and interest tax savings for the 3-year planning period.Starting in year 4, you expect a constant growth rate of 1%, which is applicable to both equity- and debt-related cash flows.The unlevered cost of equity is 15% and the cost of debt is 8%.The tax rate is 35%.Cash flows are given in millions. Find the enterprise value.
Year 1 Year 2 Year 3
Free Cash Flow 6 10 13
Tax Savings 1 2 1
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