Calculate company current value using the vc method

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A. Your company is forecasting the following levels of net income over the next five years.

Year 1: $150,000

Year 2: $200,000

Year 3: $225,000

Year 4: $275,000

Year 5: $300,000

An investor approaches you about an investment. He wants to use 35% as a discount rate in computing your company's value. Similar companies have P/E ratios of 15. Calculate your company's current value using the VC method.

B. Your company has a forecast net income of the following.

Year 1: $300,000

Year 2: $500,000

Year 3: $750,000

Companies similar to yours have P/E ratios of 12. What is your company's terminal value?

C. What is "terminal value"?

A company's P/E ratio.

The discounted value of a company.

The value of a company today.

The value of a company at the end of some future time period.

Reference no: EM132409679

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