DCF or discounted cash flow model exam answers from Wall street prep. Please note that the order of the questions are mixed for everyone but the questions and answers are the same!
8/15/23, 7:03 PM Completed Exam | Wall Street Prep
Back to Course | Exit to Learning Dashboard
Review: DCF Modeling Exam
Question 1
The next two questions use the data below. The data will be repeated on the next question:
You have been tasked with building a stand-alone DCF valuation for Milner Beverages, a publicly traded company, using the
unlevered two-stage approach. You calculate the following:
$ in millions 2017 2018 2019 2020 2021 2022 2023
Unlevered free cash flow 110.0 120.0 150.0 170.0 200.0 250.0 280.0
In addition, you calculate the following:
WACC = 8.00%
Perpetuity growth rate (annual growth rate of unlevered free cash flows after 2023) = 3.00%
Calculate enterprise value at the beginning of 2017 assuming all cash flows occur at year-end. Use whole numbers (i.e. 1 year
exactly equals 1 period when calculating returns and discounting).
$4,173.30
$4,271.40
$4,540.60
$6,505.80
$6,673.80
Question 2
This question uses the same data as the previous question, shown below.
You have been tasked with building a stand-alone DCF valuation for Milner Beverages, a publicly traded company, using the
unlevered two-stage approach. You calculate the following:
$ in millions 2017 2018 2019 2020 2021 2022 2023
Unlevered free cash flow 110.0 120.0 150.0 170.0 200.0 250.0 280.0
In addition, you calculate the following:
WACC = 8.00%
Perpetuity growth rate (annual growth rate of unlevered free cash flows after 2023) = 3.00%
Using the mid-year convention, calculate the enterprise value as of December 31, 2016. Assume all cash flows, including
perpetuity cash flows, occur midyear.
$4,110.10
$4,306.90
$4,438.90
$6,709.30
$6,717.90
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through EFT, credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying this summary from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller melindaselinas. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy this summary for R336,42. You're not tied to anything after your purchase.
