Free Cash Flow Help
I am trying to learn finance. And there is this question on Free Cash Flow. I've done the regular Cash Flow before but never done this.
Question:
You have been given the following numbers from the management of a company as an estimation of future performance (numbers in MSEK) (see the picture):
Year 0: Ebit = 0; Depreciation = 0; Working Capital = 100; Investments = 0 Year 1: Ebit = 180; Depreciation = 20; Working Capital = 120; Investments = 50 Year 2: Ebit = 200; Depreciation = 24; Working Capital = 125; Investments = 55 Year 3: Ebit = 230; Depreciation = 27; Working Capital = 130; Investments = 60
The free cash flow (FCF) in year 4 is estimated to be 150 MSEK and is expected to grow by 4 % until the end of time. The WACC of the company is 13 % and the company tax paid is 25 %
What is the value of the equity of the company if they have outstanding debt of 400 M€?
I'd appreciate you so much
I bet if you google the name of your textbook and the question number that youll find the solution online.
Hi George. This is one of those exercises that my teacher gave me in paper.
Google "how to do a DCF" and you will just have to match the numbers up. Instead of waiting several hours for somebody to tell you the answer, be resourceful or just give it a try and get it done. This problem seriously takes 2 minutes to do.
I'm new to Finance. I tried to calculate but didn't seem to get the right answer thats why I asked here to see how everybody's gonna solve this question. And I don't think a beginner can do it in 2 minutes easily. And sweetie, I can stay here all night and all day too in case you want to lurk.
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