Valuing a firm off EBITDA
A firm with EBITDA of 1.27m/yr and tax rate of 35%. All equity financed, 10% WACC. What is the firm value? I'm confused because I normally use EBIT, but have no information on D&A
A firm with EBITDA of 1.27m/yr and tax rate of 35%. All equity financed, 10% WACC. What is the firm value? I'm confused because I normally use EBIT, but have no information on D&A
+957 | Bank of America - Juniors Strike to start Monday May 6th | 124 | 27m | |
+550 | BOFA ALREADY TRYING TO COVER UP THEIR TRACKS | 72 | 1h | |
+318 | This is a dark day for Wall Street. | 33 | 1h | |
+154 | Investment Banking US League Table YTD 2024 (FactSet) | 85 | 5h | |
+147 | Big Layoff at Barclays - 5/1/24 | 85 | 12h | |
+90 | “Americans just work harder” | 54 | 5h | |
+83 | Would comitting to ATL İB be stupid? Please give feedback. | 45 | 3d | |
+69 | Sleeping on Jefferies??? | 35 | 6h | |
+60 | What's up with RBC nowadays? | 28 | 2h | |
+58 | BofA List | 7 | 4h |
Career Resources
assuming no growth--> (1.27(1+0)(1-.35))/(.1-0)=8.255MM
dont over think it. The point of the question is probably to see if you know how to do the most basic dcf. For a sanity check--> 8.255/1.27=6.5x seems reasonable
If growth is zero and its a mature company, D&A should be offset by capex on a cash basis. Assuming theres no change in NWC as well.
Great, thanks. I was thinking to much into it
Why use the perpetuity formula? Surely that will only calculate the terminal value not the full value of the company.
The assumption is that they will make 1.27mm ebitda each year for perpetuity. Read the question again
hang on, where is this mentioned? Would you just mind explaining your methodology behind this answer, thats all I am after
Voluptas maiores maiores accusamus sint dolore possimus. Sed vero aliquam numquam accusantium explicabo itaque doloribus. Excepturi sed facere nemo.
Cumque id enim sit magnam ullam ea magnam placeat. Perferendis reiciendis autem perferendis consequatur enim. Molestias atque earum debitis tempore. Esse voluptatem distinctio officia excepturi repellendus impedit.
Quia iste reprehenderit voluptatem molestias illum. Et blanditiis eum rerum quia. Est voluptas suscipit qui alias. Eum harum quidem quos aut accusamus et molestiae. Facere fugit fugit voluptates et deserunt. Non consequatur corporis ipsa deleniti libero.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...