Uses data on post-LBO forecasts of the balance sheet, and on the post-LBO valuation of company Y
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Uses data on post-LBO forecasts of the balance sheet, and on the post-LBO valuation of company Y | |||||||||||
Cash flows | Balance Sheet | ||||||||||
2021 Dec | 2022 Dec | 2023 Dec | 2024 Dec | Dec-20 | Dec-21 | Dec-22 | Dec-23 | Dec-24 | |||
EBITDA | 2866 | 2981 | 3100 | 3224 | Cash and ST Investments | 895 | 1405 | 1880 | 2684 | 3706 | |
Capital expenditures | -1090 | -1220 | -989 | -875 | Receivables and Inventory | 3256 | 3309 | 3364 | 3422 | 3481 | |
Change in NWC | -53 | -55 | -57 | -60 | Current Assets | 4151 | 4714 | 5244 | 6106 | 7187 | |
Taxes | -373 | -370 | -443 | -493 | Net Property, Plant and Equipment | 7356 | 7666 | 8075 | 8220 | 8218 | |
Cash flows | 1350 | 1336 | 1610 | 1796 | Non-current Assets | 7356 | 7666 | 8075 | 8220 | 8218 | |
Discounted cash flow | 1224.121 | 1098.1 | 1200.1 | 1213.514 | Total Assets | 11507 | 12380 | 13319 | 14326 | 15405 | |
Terminal value | 22073 | ||||||||||
2020 Dec | |||||||||||
Firm (enterprise) value | 19649 | ||||||||||
Total debt | 18675 | ||||||||||
Cash | 895 | ||||||||||
Equity value | 1869 | ||||||||||
WACC | 10.3% | 0.103 | |||||||||
Long-term growth | 2.0% | ||||||||||
The private equity fund is planning to invest 2000 in cash in this deal in December 2020. | |||||||||||
a) What is the NPV of the deal for the private equity fund in Dec 2020? | |||||||||||
b) What is the IRR of the deal, if the PE fund exits in 2024? Assume no cash payouts between 2020 and 2024. |
Related Book For
Financial Reporting Financial Statement Analysis and Valuation
ISBN: 978-0324302950
6th edition
Authors: Clyde P. Stickney
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