Calculating enterprise value and the main factors

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Reference no: EM13826419

Problem:

The projected Free Cash Flow (FCF) of ABC Inc. Are provided below. It has a terminal value of $1,500 million, an exit multiple of 7.0x, and WACC of 10.0%.

($ in millions)

Free Cash Flow Projections

Year 1

Year 2

Year 3

Year 4

Year 5

$100.0

$110.0

$120.0

$130.0

$140.0

  1. Determine enterprise value using end of year discounting for ABC Inc.
  2. Critically evaluate your findings and show how the enterprise value might be assessed with respect to risk profiling.

b) What are the main factors that will cause a value resulting from the application of discounted cash flows to be higher or lower? Please support your arguments examples or relevant illustrations.

Extra Information:

This question is basically belongs to Finance as well as it discusses about calculating enterprise value and the main factors that will cause value resulting from application of discounted cash flows to be higher or lower.

Reference no: EM13826419

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