Determine the enterprise value for the company

Assignment Help Financial Management

Reference no: EM13826828

The Thibodeaux Crawfish Company wants to determine its value multiple. They are estimating a 3 year high-growth period with a starting sales level of $1,250, EBIT of $500, depreciation of $75, tax rate of 35%, and capital invested of $700. During the high-growth period, the firm will have a reinvestment rate of 65% and a cost of capital of 9.0%. After the high-growth period, the growth rate will be 3%. Mention the detailed formula in use, preferably using Excel File.

a) Using this information, determine the enterprise value for the company, as well as EV/EBITDA, EV/Cap investment and EV/Sales.

b) What would the impact to the valuations if the tax rate were 40% and the reinvestment rate during the high-growth period was 70%?

Reference no: EM13826828

Questions Cloud

Case report-lifesung corporation : Having impressed Frank Chan with your analysis of product costs and activity-based costing, you have now been invited to attend the department managers meeting of the Electronics Division of LifeSung Corporation. "We need you there to help provide..

Convert the borrowed ugandan shillings to target currency : On Monday, you borrow your funding currency (the Ugandan Shilling) at the Ugandan borrowing rate, convert the borrowed Ugandan Shillings to the target currency (the US Dollar) and invest it at the US lending rate until Friday.

Why is too much liquidity not a good thing : Why is too much liquidity not a good thing?

Protestant christians belief in jesus saving them : These questions related to Religious Studies. Check whether or not the statements are correct or incorrect. The first question is about Protestant Christians' belief in Jesus saving them

Determine the enterprise value for the company : The Thibodeaux Crawfish Company wants to determine its value multiple. They are estimating a 3 year high-growth period with a starting sales level of $1,250, EBIT of $500, depreciation of $75, tax rate of 35%, and capital invested of $700. Using this..

What is the southwest business model and why is it effective : What is the Southwest business model and why is it so effective. Is the "Continental Lite" and "Shuttle by United" achieving their objective of matching Southwest's price and service offering

Essay on recent marketing stimulus : Essay on Recent Marketing Stimulus: Advertisement

A wal-mart store to find an item out of stock : Have you ever walked into a Wal-Mart store to find an item out of stock? Using the concepts discussed forecasting and in this module economic order quantity, address the following questions: How does Wal-Mart ensure that its shelves are always full? ..

Significance of financial ratios and the information : By themselves, do financial ratios provide all the information required to manage an organisation profitably?

User Account

All Pages