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Chapter 4: A Discounted Cash Flow

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Added on  2020-06-04

Chapter 4: A Discounted Cash Flow

   Added on 2020-06-04

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Chapter 4: A Discounted Cash Flow_1
Chapter 4: A Discounted Cash Flow Valuation: General Mills, Inc. (10 marks)First scenario Year20102011201220132014Net cash flow fromoperations21072107210721072107Discounting factor @ 10%0.9110.8300.7560.6880.627PV of cash flows1,9191,7481,5921,4501,321Terminal ValueSum of PV of FCF for explicit forecast8,030 WACC9.79%Long term growth in Revenues0%Present Value of terminal value8,458 Terminal Value as % of Total Value51%Equity ValueEnterprise Value16,488 Second scenario: when cash flow from operation will increase by 3%Year20102011201220132014Net cash flow from operations21702235230223712443Discounting factor @ 10%0.9110.8300.7560.6880.627PV of cash flows1,9771,8541,7401,6321,531Terminal ValueSum of PV of FCF for explicit forecast8,734 WACC9.79%Long term growth in Revenues0%Present Value of terminal value9,805 Terminal Value as % of Total Value53%Equity Value
Chapter 4: A Discounted Cash Flow_2

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