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Unformatted text preview: ] R ² [R R R F M F i-+ = , where R M R F is the market premium .) A. Complete the following table entries (Excel is available on the course web page). Then determine Blazer s value using NPV, APV, FTE, and CCF methods. In using APV, determine what BLAZER s value would be if BLAZER financed only with equity. That is, estimate the value of NPVF. FINC 727: Corporate transactions and business valuation Professor Robert Hansen 2 End of year 1 2 3 4 annual cash flows EBIT $400.00 $400.00 $400.00 $400.00 interest EBT Taxes NI Dep CAPEX Change in WC Avail cash flow Equity cash flow annual debt schedule Beginning debt Principal payments Debt terminal value estimates Firm Value Debt Equity annual discounting Debt/capital Equity/capital Asset beta All equity WACC Debt beta Equity beta Cost of equity Cost of debt WACC-cost of capital...
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