Victoria Enterprises expects earnings before interest and taxes (EBIT) next year of 1.3 million. Its depreciation and capital expenditures will both be $303,000, and it expects its capital expenditures to always equal its depreciation. Its working capital will increase by $48,000 over the next year. Its tax rate is 25%. If its WACC is 10% and its FCFs are expected to increase at 3% per year in perpetuity, what is its enterprise value? The company's enterprise value today is $ (Round to the nearest dollar.)
Victoria Enterprises expects earnings before interest and taxes (EBIT) next year of 1.3 million. Its depreciation and capital expenditures will both be $303,000, and it expects its capital expenditures to always equal its depreciation. Its working capital will increase by $48,000 over the next year. Its tax rate is 25%. If its WACC is 10% and its FCFs are expected to increase at 3% per year in perpetuity, what is its enterprise value? The company's enterprise value today is $ (Round to the nearest dollar.)
Chapter2: The Domestic And International Financial Marketplace
Section2.A: Taxes
Problem 5P
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