a) What is the value of Expert Inc. using the DCF method? b) What...
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a) What is the value of Expert Inc. using the DCF method?
b) 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 15 Sales 13,960 4,080 4,200 4,326 4,458 1,782 1,794 1,806 -1,860 1,917 Cost of goods sold Marketing costs Administrative costs 870 897 924 996 1,026 396 408 420 432 447 EBITDA 912 981 1050 1038 1068 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 173 debt The corporate tax rate is 37% An increase in inflows of 2% to perpeniity can be expected from year 6
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