What would be the venture equity value

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Problem - Enterprise and Equity Value Concepts - Assume a venture has a perpetuity enterprise value cash flow of $800,000. Cash flows are expected to continue to grow at 8 percent annually and the venture's WACC is 15 percent.

A. Calculate the venture's enterprise value.

B. If the venture has $2 million in interest-bearing debt obligations, what would be the venture's equity value?

C. Show how your answers to Parts A and B would change if the perpetuity cash flow growth rate was only 6 percent and the WACC was 16 percent.

Reference no: EM132906754

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