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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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#### 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