What is bandai firm value

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Bandai is a private company. Assume that this company will be fully owned by its private owner for the first year (year 1), will access technology venture capitalist in year 2, and is expected to go public at the end of year 2. The long-term growth rate is 2% forever after year 2. The publicly-traded peer companies have an average beta of 1.2. The correlation of Bandai with the market is 0.3 at the private company stage, and 0.6 at the venture capital stage. The company is all equity funded (no debt). The risk-free rate is 2% and the market risk premium is 4%. What is Bandai's firm value?

Reference no: EM132731576

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