Question

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

Answer 1

$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.