It is the end of 2020 and you are perfoming a DCF of a company using a 4 year planning period. You have forecasted an income statement and balance sheet. You decide to use an exit multiple of 5x EV/EBITDA for the terminal value. What is the present value of the terminal value?

  

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Income Statement Sales Operating Expenses Depreciaton EBIT Interest Earnings before taxes Taxes Net Income Reorganized Balance Sheet Operating working capital PP&E Invested Capital Debt Unfunded Pension Liability Equity Non-controlling Interest Invested Capital DCF Assumptions: - Marginal Tax rate - Growth rate into perpetuity - WACC 2020(A) 45,000 900,000 945,000 172,000 58,000 603,000 112,000 945,000 2021(E) 580,000 (270,000) (150,000) 160,000 (10,320) 149,680 (37,420) 112,260 51,000 890,000 941,000 172,000 58,000 599,000 112,000 941,000 2022(E) 696,000 (369,000) (165,000) 162,000 (10,320) 151,680 (37,920) 113,760 47,200 933,000 980,200 172,000 58,000 638,200 112,000 980,200 2023(E) 835,200 (538,000) (170,000) 127,200 (10,320) 116,880 (29,220) 87,660 53,600 1,010,000 1,063,600 172,000 58,000 721,600 112,000 1,063,600 25% 2% 9.50% 2024(E) 918,700 (562,000) (175,000) 181,700 (10,320) 171,380 (42,845) 128,535 57,300 1,010,000 1,067,300 172,000 58,000 725,300 112,000 1,067,300 Income Statement Sales Operating Expenses Depreciaton EBIT Interest Earnings before taxes Taxes Net Income Reorganized Balance Sheet Operating working capital PP&E Invested Capital Debt Unfunded Pension Liability Equity Non-controlling Interest Invested Capital DCF Assumptions: - Marginal Tax rate - Growth rate into perpetuity - WACC 2020(A) 45,000 900,000 945,000 172,000 58,000 603,000 112,000 945,000 2021(E) 580,000 (270,000) (150,000) 160,000 (10,320) 149,680 (37,420) 112,260 51,000 890,000 941,000 172,000 58,000 599,000 112,000 941,000 2022(E) 696,000 (369,000) (165,000) 162,000 (10,320) 151,680 (37,920) 113,760 47,200 933,000 980,200 172,000 58,000 638,200 112,000 980,200 2023(E) 835,200 (538,000) (170,000) 127,200 (10,320) 116,880 (29,220) 87,660 53,600 1,010,000 1,063,600 172,000 58,000 721,600 112,000 1,063,600 25% 2% 9.50% 2024(E) 918,700 (562,000) (175,000) 181,700 (10,320) 171,380 (42,845) 128,535 57,300 1,010,000 1,067,300 172,000 58,000 725,300 112,000 1,067,300

Answer rating: 100% (QA)

calculate the present value of the terminal value using the exit multiple method we need the project... View the full answer