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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
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18 votes
18 votes
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

User Munazza
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1 Answer

14 votes
14 votes

Answer:

$315,198

Step-by-step 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.

User Kmera
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