You are using DCF to value a company has 51.5 M shares of common stock and $192.3 M of debt face value. The book value of their equity is $364.9 M and they have marketable securities of $14.3 M. The tax rate is 25% and the weighted average cost of capital is 10.2%. You have estimated free cash flows of $50 M in year 1, $65 M in year 2, and $75M in year 3. a. If the expected annual growth in free cash flow beyond year 3 is 1.8%, what is the enterprise value for this target? Suppose that the above target's LTM revenue was $312.5M and revenue is predicted to grow at 20% annually during the forecast horizon. What terminal multiple of Enterprise Value-to-Revenue is implied by the perpetuity growth rate assumed in part a? You have made the following two-year forecast for a potential target firm. What is your estimate of free cash flow for each forecast year? Year 2 (In $ Millions) Revenue Cost of goods sold SG&A EBIT Year 1 957.9 862.1 67.0 972.2 875.0 68.1 29.2 13.4 15.7 28.7 12.5 Interest expense Taxable income 16.2 5.5 Taxes 5.3 10.7 10.4 Net Income Change in net working capital Capital Expenditures Depreciation - 2.7 32.4 1.8 39.7 53.5 52.7 You are using DCF to value a company has 51.5 M shares of common stock and $192.3 M of debt face value. The book value of their equity is $364.9 M and they have marketable securities of $14.3 M. The tax rate is 25% and the weighted average cost of capital is 10.2%. You have estimated free cash flows of $50 M in year 1, $65 M in year 2, and $75M in year 3. a. If the expected annual growth in free cash flow beyond year 3 is 1.8%, what is the enterprise value for this target? Suppose that the above target's LTM revenue was $312.5M and revenue is predicted to grow at 20% annually during the forecast horizon. What terminal multiple of Enterprise Value-to-Revenue is implied by the perpetuity growth rate assumed in part a? You have made the following two-year forecast for a potential target firm. What is your estimate of free cash flow for each forecast year? Year 2 (In $ Millions) Revenue Cost of goods sold SG&A EBIT Year 1 957.9 862.1 67.0 972.2 875.0 68.1 29.2 13.4 15.7 28.7 12.5 Interest expense Taxable income 16.2 5.5 Taxes 5.3 10.7 10.4 Net Income Change in net working capital Capital Expenditures Depreciation - 2.7 32.4 1.8 39.7 53.5 52.7