Markets: A Rigorous Course

M06 · Problem 3 ★ Check

A two-stage DCF

A listed specialty-chemicals company has last-year FCFF of ₹500 cr. You forecast 20% growth for 7 years, then 5% forever, with WACC 13%. (a) Compute the explicit-stage PV using the closed form (6.7), the terminal value, its PV, the enterprise value and the terminal-value share. (b) Net debt is ₹1,200 cr and there are 25 crore shares. What is the value per share?

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