Electronix Inc. Valuation This assignment aligns with Outcome 7: Evaluate business valuation approaches and methodology in communicating findings to stakeholders. Electronix Inc. manufactures electronic products. The company’s weighted average cost of capital is 8 percent. The company forecasted the following free cash flows for the next 20 years: Cash Flows Table Year Free Cash Flows 1 $15,000,000 2 $16,200,000 3 $21,000,000 4 $23,000,000 5 $27,000,000 6-10 $25,000,000 per year 11-20 $21,000,000 per year Prepare a valuation report for Electronix Inc. using the discounted cash flow approach. Identify the accounts taken into consideration in the discounted cash flow method. Compare the difference between future income method and the discounted future cash flow method.
Electronix Inc. Valuation This assignment aligns with Outcome 7: Evaluate business valuation approaches and methodology in communicating findings to stakeholders. Electronix Inc. manufactures electronic products. The company’s weighted average cost of capital is 8 percent. The company forecasted the following free cash flows for the next 20 years: Cash Flows Table Year Free Cash Flows 1 $15,000,000 2 $16,200,000 3 $21,000,000 4 $23,000,000 5 $27,000,000 6-10 $25,000,000 per year 11-20 $21,000,000 per year Prepare a valuation report for Electronix Inc. using the discounted cash flow approach. Identify the accounts taken into consideration in the discounted cash flow method. Compare the difference between future income method and the discounted future cash flow method.
Chapter14: Security Structures And Determining Enterprise Values
Section: Chapter Questions
Problem 8EP
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Question
Electronix Inc. Valuation
This assignment aligns with Outcome 7: Evaluate business valuation approaches and methodology in communicating findings to stakeholders.
Electronix Inc. manufactures electronic products. The company’s weighted average cost of capital is 8 percent. The company forecasted the following free cash flows for the next 20 years:
Cash Flows Table
| Year | Free Cash Flows |
|---|---|
| 1 | $15,000,000 |
| 2 | $16,200,000 |
| 3 | $21,000,000 |
| 4 | $23,000,000 |
| 5 | $27,000,000 |
| 6-10 | $25,000,000 per year |
| 11-20 | $21,000,000 per year |
- Prepare a valuation report for Electronix Inc. using the discounted cash flow approach.
- Identify the accounts taken into consideration in the discounted cash flow method.
- Compare the difference between future income method and the discounted future cash flow method.
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