Reference no: EM131326930
IDX Technologies is a privately held developer of advanced security systems based in Chicago. As part of your business development strategy, in late 2016 you initiate discussions with IDX’s founder about the possibility of acquiring the business at the end of 2016. You want to estimate the value of IDX per share using a discounted FCF approach and the following data:
Debt (year-end 2016): $30 million
Cash (year-end 2016): $110 million
Shares outstanding: 50 million
Expected FCF in 2017: $45 million
Expected FCF in 2018: $50 million
Future FCF growth rate beyond 2018: 5%
Weighted-average cost of capital: 10%
a) The terminal enterprise value (i.e. continuation value, or PV of all the FCF from 2019 and beyond) as of year-end 2018 is $______ mm.
b) The Enterprise value at the end of 2016 is $______ mm.
c) The total equity value (at the end of 2016) is $________ mm.
d) The value of IDX per share (at the end of 2016) is $________.
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