Given the Following Data,what Is the Enterprise Value of the Company

question 12

Multiple Choice

Given the following data,what is the enterprise value of the company? $$\begin{array} { | l | r | } \hline \text { Free cash flow (FCF) for year } 1 & \$ 50 \mathrm {~m} \\\hline \text { FCF for year } 2 & \$ 50 \mathrm {~m} \\\hline \text { Continuing value of FCF at t = 2 } & \$ 291.6 \mathrm {~m} \\\hline \text { Interest tax shield (ITS) for year } 1 & \$ 5 \mathrm {~m} \\\hline \text { ITs for year } 2 & \$ 5 \mathrm {~m} \\\hline \text { Continuing value of ITS at t = } 2 & \$ 17.5 \mathrm {~m} \\\hline \text { Unlevered cost of equity } & 8 \% \\\hline \text { Wacc } & 7 \% \\\hline \text { Midyear adjustment factor } & \$ 4 \mathrm {~m} \\\hline \text { Excess cash and investments } & \$ 18 \mathrm {~m} \\\hline\end{array}$$

• A)$301m
• B)$285m
• C)$349m
• D)$100m

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