H Tax rate WACC Shares outstanding Debt value Growth rate (after Year 5) 34% 13%...
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H Tax rate WACC Shares outstanding Debt value Growth rate (after Year 5) 34% 13% 2,000,000 $30,000,000 5% You are considering the acquisition of XYZ Enterprises. You have made the following projections for XYZ for years 1-5. What is the value of XYZ using the perpetual growth method for calculating terminal value? Year 1 2 3 4 5 EBIT 5 20,000,000 $ 22,000,000 $ 25,000,000 $ 26,000,000 $ 30,000,000 Depreciation $ 5,000,000 $ 5,000,000 $ 6,000,000 $ 7,000,000 $8,000,000 CAPEX $ 10,000,000 $10,000,000 $ 15,000,000 $ 15,000,000 $ 15,000,000 Investment in Working Capital $ 3,000,000 $ 4,000,000 $ 4,000,000 $3,000,000 $4,000,000 FCF = EBIT(1-Tc) + Depreciation - CAPEX - Investments in WC FCF PV (Years (1-5) FCF (Year 6) Terminal Value pv (Terminal Value) Firm value Value of equity Value/share
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