Revenue-based valuation for the valuation of an automotive company the reduced cash flow method will be applied from its methods. Company weighted below is information about determining the average cost of capital (r) shared:
Revenue-based valuation for the valuation of an automotive company
the reduced cash flow method will be applied from its methods. Company weighted
below is information about determining the average cost of capital (r)
shared:
* 60% of the company's capital consists of equity, while the rest of the capital
40% was obtained by financial borrowing.
* The borrowing cost of the company is %(12 + 0.2 * X).
* Corporate tax rate is 30%.
* The firm's β-free coefficient is 1.2.
* The risk-free interest rate is %(10 + 0.1 * Y) and the market return is %(18 + 0.1 * Z).
Consider a 10-year projection period for reduced cash flow analysis
shall be. 1 of the company. net income (1,200,000 + 50,000 * X) $ as of year-end
and that's 10 per cent of revenue. it is expected to increase by $ 45,000 + 1,000 * Y each year until the end of the year.
The continuous growth rate of cash flows after the projection period is 4 %
calculate the value of the firm by assuming.
x =0
y=2
z=0
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