Calculating Enterprise Value All figures in USD thousands unless stated Levered free Cashflow Debt Unlevered Free Cash Flow Cash 8.75% 12.00% Year D 24,043 33,222 38,212 9,700 Year 1 Year 2 25,245 26,507 34,304 38,058 39,549 40,933 10,782 14,536 WACC Cost of Equity Given only the above information, what is the Enterprise Value at the end of Year 0? Assume end-of-year discounting. Year 3 27,832 43,234 42,366 Year 4 29,224 50,517 43,849 19,712 26,995 Year 5 30,685 55,480 45,383 31,958 Year 6 32,219 60,198 46,972 36,676
Calculating Enterprise Value All figures in USD thousands unless stated Levered free Cashflow Debt Unlevered Free Cash Flow Cash 8.75% 12.00% Year D 24,043 33,222 38,212 9,700 Year 1 Year 2 25,245 26,507 34,304 38,058 39,549 40,933 10,782 14,536 WACC Cost of Equity Given only the above information, what is the Enterprise Value at the end of Year 0? Assume end-of-year discounting. Year 3 27,832 43,234 42,366 Year 4 29,224 50,517 43,849 19,712 26,995 Year 5 30,685 55,480 45,383 31,958 Year 6 32,219 60,198 46,972 36,676
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
A 165.
Subject:- finance
Transcribed Image Text:Discounted Cash Flow Valuation - Calculating Enterprise Value
A discounted cash flow can be used to calculate either enterprise value or equity value.
Open the attached Excel file found above the question and go to the worksheet labeled: EV (Blank)
Calculate the company's enterprise value at the end of Year O given the information in the Excel file. Assume end-of-period-
discounting.
Calculating Enterprise Value
All figures in USD thousands unless stated
Levered free Cashflow
Debt
Unlevered Free Cash Flow
Cash
WACC
Cost of Equity
8.75%
12.00%
Year 0
24,043
33,222
38,212
9,700
Year 1
25,245
34,304
39,549
10,782
Year 2
26,507
38,058
40.933
14,536
Given only the above information, what is the Enterprise Value at the end of Year 0? Assume end-of-year discounting.
Year 3
27,832
43,234
42,366
19,712
Year 4
29,224
50,517
43.849
26,995
Year 5
30,685
55,480
45,383
31,958
Year 6
32,219
60,198
46,972
36,676
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Follow-up Questions
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Follow-up Question
The answer choices for this question are:
A) $151,854
B) $175,514
C) $155,290
D) $193,501
When calculating the enterprise value at the end of year 0, what calculation must be made in order to arrive at one of the four answers above?
Solution
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