Using the information in Exercise 20-40 for Yum! Brands, determine the valuation of the company at the
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Using the information in Exercise 20-40 for Yum! Brands, determine the valuation of the company at the end of 2016 using each of the following three methods (round answers to the nearest whole dollar). Assume earnings and cash flows for the coming 10 years are equal to the earnings and cash flows in 2016; the appropriate free cash flow multiple is 23.4.
a. Market capitalization.
b. Enterprise value.
c. Free cash flow multiple.
Free Cash FlowFree cash flow (FCF) represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets. Unlike earnings or net income, free cash flow is a measure of profitability that excludes the...
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1 Market capitalization 355000000 shares x 63 per share 22365 million 2 Enterp...View the full answer
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