Time Warner is considering a sale of its publishing division. The division had earnings EBITDA of $550

Question:

Time Warner is considering a sale of its publishing division. The division had earnings EBITDA of $550 million in the most recent year (depreciation was $150 million), growing at an estimated 5% a year (you can assume that depreciation grows at the same rate). The return on capital in the division is 15%, and the corporate tax rate is
40%. If the for the division is 9%, estimate the following:
EV/FCFF multiple.
EV/EBIT multiple.
EV/EBITDA multiple.
Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...