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DCF Valuation: Paramount before Takeover

Year

EBITDA

1994
1995
1996
1997
1998

660.6
737
790.8
848.4
910.1

Given Data
Depreciation

162
172
184
196
209

CapEx

W/Capital
Investment

Asset
Sales

Reestimated
EBITDA

Terminal
Value

160.1
177.3
176.7
202.9
216.6

45.6
62.1
66.5
71.2
76.2

0
900
0
0
0

660.6
737
751.26
805.98
864.595

12741.4

Terminal
Value

PV Factor
at 10 %

PV

205.6
1115.1
244.2
248.1
266.75

12741.4

0.9090909091
0.826446281
0.7513148009
0.6830134554
0.6209213231

186.9090909091
921.5702479339
183.4710743802
169.4556382761
8077.037708552

Total

Firm

Value

9538.4437600512

Calculations
Year

Tc

(1-Tc)x
EBITDA

1994
1995
1996
1997
1998

0.5

330.3
368.5
395.4
424.2
455.05

(Tc)xDep Free Cash


Flow (FCF)
81
86
92
98
104.5

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