Winston winery to estimate the value of hilco wines. hilco, Ask an Expert

Finance

Opex Capital is a small investment advisory firm located in Portland, Oregon, that has been hired by Winston Winery to estimate the value of Hilco Wines. Hilco is a small winery that is being considered for purchase by Winston. Opex has obtained the financial statements of Hilco and prepared the following estimates of the firm's free cash flow for the next five years:

Year 1 = $100,000 cash flows, Year 2 = $120,000 cash flows, Year 3 = $135,000 cash flows, Year 4 = $150,000 cash flows, Year 5 = $175,000 cash flows

At the end of five years, Opex has estimated that the winery should be worth approximately five times its Year 5 cash flow.

a) If the appropriate discount rate for valuing the winery is 15%, what is your estimate of the firm's enterprise value?

b) Winston Winery plans to borrow $400,000 to help finance the purchase. What is Hilco's equity worth?

View complete question

Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M945170

Have any Question?Write your Review or question?

Related Questions in Basic Finance

What are the ways that it can help comply with legal

What are the ways that IT can help comply with legal requirements and social responsibilities surrounding the sales of alcohol?

Assignment - custom cabinets inc case answer the following

Assignment - Custom Cabinets, Inc. CASE Answer the following questions. 1. Should there be additional overtime, and if so, how much? 2. Should additional laminate be purchased, and if so, how much? 3. Should additional w ...

If you deposit 600 every year for the next 9 years with

If you deposit $600 every year for the next 9 years, with first deposit to be made today and all deposits to be made at the beginning of every year, in an account that pays 6.12% APR with annual compounding, how much mon ...

How does the lack of liquidity affect your execution

How does the lack of liquidity affect your execution strategy? Does this affect your use of limit orders and market orders? (Please attach any known literature if possible so i can refer to it. If not, its fine!)

Question - if tapley inc borrows 500000 on a 10 add on

Question - If tapley inc borrows 500000 on a 10 add on basis payable over 3 years in 36 equal end of month installments how large would the monthly payments be?

Tcs company has just started to deposit 225 at the end of

TCS company has just started to deposit $225 at the end of each month into its employees retirement fund (i.e., the first deposit will take place one month from now). These deposits will continue for each employee until ...

You are bearish on telecom and decide to sell short 100

You are bearish on Telecom and decide to sell short 100 shares at the current market price of $47 per share. a. How much in cash or securities must you put into your brokerage account if the broker's initial margin requi ...

Grant technologies needs 300000 to pay its supplier grants

Grant Technologies needs $300,000 to pay its supplier. Grant's bank is offering a 210-day simple interest loan with a quoted interest rate of 11 percent and a 20 percent compensating balance requirement. Assuming there a ...

Noel and noelle are thriving young professionals noel earns

Noel and Noelle are thriving young professionals. Noel earns $75,000 as a financial planner and Noelle earns $85,000 as an occupational therapist. They have no children. Both Noel and Noelle are covered by an employer sp ...

What are some methods a company use to ensure the entire

What are some methods a company use to ensure the entire organization understands and is involved with promotions that include their brand image? Can you share examples?

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Basic Finance Expert