c. Business valuation – Calculate the fair value of the company through the Discounted Cash Flows method
and EBITDA Multiple ratio.
– Discounted Cash Flows method
So you will need to calculate the Cost of Capital (WACC), forecast the Free Cash Flows figures for the next 4-5 years, including the terminal value. Do not
forget to include assumptions and the sources, if applies, for each calculation.
– EBITDA Multiple ratio
You just need to find the most recent EBITDA of the Company (lets say 2020) and then multiply by the ratio of the Industry which can be found at Damodarans website (link included below).
d. Conclusions – after you’ve worked the financial analysis and business value calculation, would you invest money in this company? why?