Question

Calculate the Future Growth Value of below company             Total Market Value of Debt                =   &nbsp

Calculate the Future Growth Value of below company

            Total Market Value of Debt                =          £260million

            Total Market Value of Equity              =          £400million

            Book Value of Stockholder’ equity     =          £300million

            Total Capital (in Book value)              =          £500million

            WACC                                      =          12% p.a.

            Current year’s EVA (t=0)                 =          £10million

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Answer #1
Total market value ( debt + equity )       a =(260+400) Mn £ 660 Mn
Total Book Value of capital     b £ 500 Mn
Perpetuity of current EVA =10/.12 83.33
Total Current Operations Value   c =500+83.33
583.33
Future Growth Value a-c =660-583.33
76.67
£ 76.67 Mn
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