User Account

All Pages

Terminal value plays an important role in enterprise

Assignment Help Finance Basics
Reference no: EM13497324

Terminal Value plays an important role in enterprise valuation. What factors affect the estimate of Terminal Value? How sensitive enterprise valuation is to Terminal value?

Please choose a set of parameters yourself and report, what percentage the terminal value contributes to the total enterprise value? How sensitive is your valuation?

You may use your own numbers or the following inputs: Gross Margin 40%
Fixed Costs $2,000
Revenue Growth Rate for Years 1 to 5 10%
FCF Steady Growth 3%
Discount Rate 12%
Year 1 Revenue $5,000
Tax Rate 35%
Terminal Year 5

Please also submit your calculations in Excel

Reference no: EM13497324

Questions Cloud

Prepare an income statement including earnings-per-share : Extraordinary gain, net of tax of 30%, is $21,000. Prepare an income statement, including earnings-per-share data, giving supporting computations. Caribou Inc. has 130,000 shares of common stock outstanding.
Compute blacksmiths earnings per share for 2012 : Compute Blacksmith's earnings per share for 2012. Start with income from continuing operations. All income and loss amounts are net of income tax.
Justin walker enterprises is considering outsourcing : Justin Walker Enterprises is considering outsourcing its billing operations
How much will the firm save or lose each year in interest : How much will the firm save or lose each year in interest if the existing bonds are called and reissued?
Terminal value plays an important role in enterprise : Terminal Value plays an important role in enterprise valuation. What factors affect the estimate of Terminal Value? How sensitive enterprise valuation is to Terminal value?
Evaluate the net present value and payback period : Compute the Net Present Value, Payback Period and the Internal Rates of Return for each alternative - on the basis of your analysis , which of the alternatives would you recommend?
What is the acceleration of the bucket : A bucket of water with a mass of 6.0 kg is attached to a rope that is wound around a cylinder. What is the acceleration of the bucket
Estimate the charge on each electrode : Two 10.0 cm -diameter electrodes 0.52 cm apart form a parallel-plate capacitor. What is the charge on each electrode after insulating handles are used to pull the electrodes away from each other until they are 1.3 cm apart
Determine the mass of the slower locomotive : Two toy locomotives approach each other along the same line, and upon collision both stop dead still. What is the mass of the slower locomotive

Reviews

Write a Review

Finance Basics Questions & Answers

  Sales, assets and financial leverage

This year Andrews achieved an ROE of 18.4%. Suppose next year the profit margin (Net Income/Sales) decreases. Assuming sales, assets and financial leverage remain the same next year, what effect would you expect this action to have on Andrews's ROE?

  What arbitrage strategy was possible

The three-month forward exchange rate was 1.0300($ per franc). What arbitrage strategy was possible? How does your answer change if the exchange rate is 1.0500($ per franc).

  What is meant by a diversification discount

How is diversification measured? What is meant by a diversification discount?

  What is the present value of your expected cash flows

You estimate that the little drive-through coffee kiosk you own will generate ordinary annuity after-tax cash flows of $150,000 per year for the next ten years. If you discount these cash flows at an annual rate of 14%, what is the present value o..

  Homer boats has accounts payable days of 20 inventory days

homer boats has accounts payable days of 20 inventory days of 50 and accounts receivable days of 30. what is its

  What is the speculative premium

The Burma Hat Company's warrant is trading for $10.20. The warrant carries the option to purchase two shares of common stock for $48. What is the speculative premium if the stock price is $51.30?

  Explain capital budgeting involves calculation present value

Explain Capital budgeting involves calculation of net present value

  You have estimated the following probability distributions

You have estimated the following probability distributions of expected future returns for Stocks X and Y.

  Dr massy who specializes in internal medicine wants to

sales mix decision dr. massy who specializes in internal medicine wants to analyze his sales mix to find out how the

  Find the discounted payback period for each project

Assume that the two projects are mutually exclusive and the cost of capital is 5%. Which project or projects should the company undertake? Base your results on the MIRR.

  Empirical research on capm indicates that beta is an

empirical research on capm indicates thata. beta is an accurate predictor of a portfolios future volatility.b. beta is

  What is the variance of the returns on this common stock

What is the variance of the returns on this common stock? Answer A. 0.0022150 B. 0.002606 C. 0.002244 D. 0.002359 E. 0.002421

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd