Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You estimate Orbit Inc. has free cash flows of $72 million arriving in 1 year, $80 million in 2 years, and $85 million in 3

You estimate Orbit Inc. has free cash flows of $72 million arriving in 1 year, $80 million in 2 years, and $85 million in 3 years. After year 3, the long term growth rate of FCF will be 2% (thus year 4 FCF is $86.7 million). Orbit has $125 million in net debt and a WACC of 14%. What is your estimate of the Enterprise Value of Orbit?

a- $285 million
b- $460 million
c- $533 million
d- $670 million
e- $800 million

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

Analysis For Financial Management

Authors: Robert C Higgins

8th International Edition

0071257063, 9780071257060

More Books

Students also viewed these Finance questions

Question

Would you recommend this program to your employer? Why?

Answered: 1 week ago