Mercury Athletics Footwear: Corporate Valuation - Essay Example

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Mercury Athletics Footwear: Corporate Valuation

0 76,566.00 Less 40% Cost Saving (Tax) 18,802.00 21,214.40 23,042.00 24,674.40 25,844.80 Capital Expenditure 11,983.00 12,226.00 13,303.00 14,258.00 14,943.00 Changes in working capital 4,569.00 2,648.00 9,805.00 8,687.00 6,234.00 Net Cash Flow 21,238.00 26,728.60 22,098.00 25,472.60 29,544.20 Terminal value Discount Factor 12% Growth rate (2%) Present Value of Net Cash Flow $18,963 $21,308 $15,729 $16,188 $16,764 Present Value of All Cash Flows (A) $88,952 Terminal Value: 2012 Net Cash Flow $30,135 2011 Present Value $301,351 2007 Present Value (B) $170,995 Value of Mercury = A+B $259,946         Considering Mercury from 2007–2011, there is growth in earnings and using the free cash flow method it is evident that the Net profit value is positive. Additionally, acquiring Mercury may lead to large market share which may eventually result into huge revenue. ...Show more

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Mercury Athletics Footwear: Corporate Valuation Introduction Following the information provided in the case study, here is the calculation of the value of Mercury Athletic Footwear as an independent firm using the free cash flow method…
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