HossBaskervill43371 HossBaskervill43371
  • 02-07-2021
  • Business
contestada

What is Company XYZ's intrinsic equity value using the WACC as the discount rate and assuming the terminal value is based on the EBITDA exit multiple

Respuesta :

Munali Munali
  • 05-07-2021

Answer:

$315,198

Explanation:

WACC = [ Equity / Total value ] * cost of equity + [ Debt / Total value ] * Cost of debt.

WACC = 11.5%

Exit multiple = Total cash outflow / Total cash inflow

Exit multiple = $120,000 / 36,000 = 3.3x

EBITDA of the company is $178,412.

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