1-What is the value of Expert Inc. using the DCF method? 2- What are the...
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1-What is the value of Expert Inc. using the DCF method?
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What are the most relevant cash flows when you value your business using the DCF method ?
6. The table below shows the forecasts for Expert Inc. (in millions of euros) Year 1 3 5 2 4,080 3,960 4,326 1,794 1,860 Sales Cost of goods sold Marketing costs Administrative costs EBITDA 1,782 870 396 912 996 4,200 1,806 924 420 1050 897 408 1,917 1,026 447 1068 981 1038 The company is expecting annual capital expenditure of 300 million per year over the next five years, working capital will increase by 50 million in years 1 and 2, and stabilize thereafter. The following information is also available: The company has net debts today of 2,250 million The company's cost of equity is estimated at 10% and the cost of debt at 6% (before tax) Financing is split 2/3 equity and 1/3 debt The corporate tax rate is 37% An increase in inflows of 2% to perpetuity can be expected from year 6
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