From the course: Introduction to Business Valuation
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Calculating value per share
From the course: Introduction to Business Valuation
Calculating value per share
- [Instructor] So now that we have our unlevered free cash flows calculated as well as our terminal values, we can now discount the cash flows to derive enterprise value. From there, we will subtract net debt to obtain equity value, then divide by shares outstanding to calculate what we think the company's share price should be, and we can compare that to the current market price. For now, we're going to assume all of the cash flows occur at the end of the year. So again, please attempt this. This will be a bit more challenging than the other calculations, but we'll obviously go through it together. Okay, let's walk through this together. First step is we need to pull in our unlevered free cash flows. It doesn't really matter which method we use. We can pull it from one of these terminal value calculations, or we can pull it from our unleveraged free cash flow calculations up above. So I'm just going to pull it from the EBITDA schedule. Again, they all match and we will fill that to…
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