You are working on an M&A transaction and need to value the potential target company. What is the value of the business (assuming five-year projections)? The following assumptions are given: EBITDA is $75 at year 0 and grow 10% each year. The company has $50 million of long-term debt on its balance sheet (10% interest rate). The company has $50 million of equity on its balance sheet. Assume ongoing CAPEX to be 4% EBITDA. Assume the CAPEX has a useful life of 10 years with no residual value. Depreciation can be accelerated (for deferred tax purposes) using the following simplified MACRS schedule: Year 1 Year 2 Year 3 Year 4 Year 5 25% 20% 15% 12% 10% The company has an effective tax rate of 40%. Assume 20 days working capital for accounts receivable, 10 for inventory, 5 for accounts payable, and 30 for accrued expenses. For simplification, assume all working capital line items are projected off of EBITDA. You have already done some research and found the risk-free rate of return is 3%, and the market has return 13% over the past 10 years. Use a 5.0x EBITDA for the EBITDA terminal value multiple. Assume a 1% perpetuity growth rate Assume the company has a beta of 1.5

What is the year 5 EBITA? What is the WACC of this company? What is the year 4 D&A ? What is the year 3 EBIT? What is the total UFCF in Year 4?