You have married into a family business and you are in charge of the finances. Your father-in-law
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Question:
You have married into a family business and you are in charge of the finances. Your father-in-law is considering an IPO and has asked you to come up with estimates for the equity value. Here are the figures you have been able to come up with so far:
- 2021 free cash flow: $9.0MM
- 2022 free cash flow: $9.8MM
- 2023 free cash flow: $10.5MM
- Annual FCF growth after 2022: grows at 2%
- 2020 EBITDA: $9.5MM
- 2020 Net Income: $6.0MM
- Company WACC (discount rate): 12%
- Total debt: $6MM
- Overall PE ratio for similar companies: 20x
- EV / EBITDA multiple that similar companies have sold for: 10x
Develop a free cash flow discounted valuation PLUS any other two valuation methods to estimate the total value of Equity.
Expert Answer:
Free Cash Flow Discounted Valuation To estimate the equity value using the free cash flow discounted valuation method we need to calculate the present ... View the full answer
Related Book For 
Modern Advanced Accounting in Canada
ISBN: 978-1259087554
7th edition
Authors: Hilton Murray, Herauf Darrell
Posted Date:
