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Knowledge Check - DCF: Facts: DCF Inc. Relevant Free Cash Flow Items

The document provides financial information for DCF Inc. to calculate its cost of equity, weighted average cost of capital (WACC), present value of free cash flows, and equity value using different terminal value methods. It lists DCF's perpetuity growth rate, exit multiple, unlevered beta, risk-free rate, market risk premium, cost of debt, total debt, cash, shares outstanding, and tax rate. It also provides DCF's projected EBITDA and unlevered free cash flow for three years. The calculations will determine DCF's cost of equity at 9.83%, WACC at 8.25%, present value of free cash flows at $827.17, present value of terminal value using

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Michael Sho Liu
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80 views

Knowledge Check - DCF: Facts: DCF Inc. Relevant Free Cash Flow Items

The document provides financial information for DCF Inc. to calculate its cost of equity, weighted average cost of capital (WACC), present value of free cash flows, and equity value using different terminal value methods. It lists DCF's perpetuity growth rate, exit multiple, unlevered beta, risk-free rate, market risk premium, cost of debt, total debt, cash, shares outstanding, and tax rate. It also provides DCF's projected EBITDA and unlevered free cash flow for three years. The calculations will determine DCF's cost of equity at 9.83%, WACC at 8.25%, present value of free cash flows at $827.17, present value of terminal value using

Uploaded by

Michael Sho Liu
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PDF, TXT or read online on Scribd
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Knowledge Check DCF

Facts:
Perpetuity growth rate Appropriate terminal exit multiple Unlevered beta 10 year risk-free rate Market risk premium Cost of debt Total debt Total cash Market value of equity Marginal tax rate 3.3% 8.0x 0.83 5.4% 6.0% 7.5% $1,190 $0 $2,210 40.0%

DCF Inc. relevant free cash flow items


EBITDA Unlevered Free Cash Flow Projected Fiscal Years Proj 1 Proj 2 Proj 3 $450.0 $475.0 $500.0 $271.7 $280.7 $290.0

Calculate for DCF Inc.:


a) b) c) d) e) f) Cost of equity WACC Present value of free cash flows Present value of the terminal value based on perpetuity growth rate method Present value of the terminal value based on the EBITDA exit multiple method Equity value based on exit multiple terminal value

Round to 2 decimal places where appropriate

1999-2013 Training The Street, Inc. All rights reserved.

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