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The MH company valuation with the DCF method (Appendix 4)

Following multiple

meetings and exchanges, MH's weighted average cost of capital and its business plan are reviewed. Using Appendix 4 assumptions, you are asked to assess the MH equity value using the discounted cash-flows method (calculations in thousands of SAR).

Business valuation using the discounted free-cash-flows method

 

After a complete analysis, it was decided to use a 12% weighted average cost of capital and the following free-cash-flows projections:

q4.png


Beyond the year N+5 (and over an infinite horizon), it will be retained a constant growth rate of 2% per year for the FCFF. The net debt value will be equal to the accounting (balance sheet) value.

q4.png

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