The discounted value of the Terminal Value (using the Perpetulty method) in your DCF analysis appears too low. The mistake couldbe:1. You forgot to grow the last projected year's UFCF by one year before calculating the Terminal Value2. Your estimated EVJEBITDA multiple for the Terminal Value is too low3. Your Equity Risk Premium needs to be reduced4. You should discount the Terminal Value over more years5. You should subtract the risk-free rate while calculating the Cost of Equity to decrease the WACCⒸ1 and 21 and 32,4 and 514 ands

In finance, the discounted cash flow (DCF) analysis is a commonly used valuation method to determine…

The discounted value of the Terminal Value (using the Perpetulty method) in your DCF analysis appears too low. The mistake could be: 1. You forgot to grow the last projected year's UFCF by one year before calculating the Terminal Value 2. Your estimated EVEBITDA multiple for the Terminal Value is too low 3. Your Equity Risk Premium needs to be reduced 4. You should discount the Terminal Value over more years 5. You should subtract the risk-free rate while calculating the Cost of Equity to decrease the WACC O1 and 2 3 and 4 1 and 3 2.4 and 14 ands

The discounted value of the Terminal Value (using the Perpetulty method) in your DCF analysis appears too low. The mistake could be: 1. You forgot to grow the last projected year's UFCF by one year before calculating the Terminal Value 2. Your estimated EVEBITDA multiple for the Terminal Value is too low 3. Your Equity Risk Premium needs to be reduced 4. You should discount the Terminal Value over more years 5. You should subtract the risk-free rate while calculating the Cost of Equity to decrease the WACC O1 and 2 3 and 4 1 and 3 2.4 and 14 ands

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter11: Venture Capital Valuation Methods

Section: Chapter Questions

Problem 1cM

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