Anonymous
Anonymous asked in Business & FinanceOther - Business & Finance · 7 years ago

finance enterprise value calucation?

You expect ABC Corporation to generate the following free cash flows over the next 5 years:

Year 1 2 3 4 5

FCF (€millions) 25 28 32 37 40

Following year five, you estimate that ANS free cash flows will grow at 5% p.a. and that ANC’s

WACC is 13%. The enterprise value of ANC corporation is closest to:

a. €396 million

b. €290 million

c. €382 million

d. €350 million

1 Answer

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  • Coco
    Lv 7
    7 years ago
    Favorite Answer

    40 / (13% - 5%) = 500

    25 / 1.13 + 28 / 1.13^2 + 32 / 1.13^3 + (37 + 500) / 1.13^4 = €395.58

    So an answer is a. €396 million

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