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    Corporate Valuation Model

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    Use the Corporate Value model and the following data to calculate a firm's total intrinsic (current) value and intrinsic value per share:

    1st yr: PBT = $1 million; Net capital investment = $200,000
    2nd yr: PBT = $1.2 million; Net capital investment = $250,000
    3rd yr: PBT = $1.3 million; Net capital investment - $125,000

    Tax rate = $40% for all three years
    WACC (k) = 10%

    After the first three years, long run constant g fcf = 5%
    Debt = $2 million
    There are 500,000 shares outstanding

    Also, show formulas and entries on financial calculator.

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    https://brainmass.com/business/weighted-average-cost-of-capital/corporate-valuation-model-56251

    Solution Preview

    Use the Corporate Value model and the following data to calculate a firm's total intrinsic (current) value and intrinsic value per share:

    1st yr: PBT = $1 million; Net capital investment = $200,000
    2nd yr: PBT = $1.2 million; Net capital investment = $250,000
    3rd yr: PBT = $1.3 million; Net capital investment - $125,000

    Tax rate = $40% for all three years
    WACC (k) = 10%

    After the first three years, long run constant g ...

    Solution Summary

    This explains the steps to compute the corporate value with the help of example.

    $2.19

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