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The goal of this exercise is to build a DCF model for WebMD, calculating both the overall enterprise value and a per-share valuation based on the company's expected future cash flows. The steps to build a DCF model are as follows:1. Revenue and Expense ProjectionsCalculate Free Cash Flow (for this particular practice, we use Levered Free Cash Flow)2. Determine the discount rate: WACC3. Discount the cash flows: Use the discount rate to calculate the present value of all future free cash flows.4. Calculate terminal value5. Discount the Terminal Value: Apply the discount rate to the terminal value to bring it back to its net present value.6. Calculating Equity Value: Subtract net debt from the enterprise value to get equity value. Divide this by the outstanding number of shares to get the intrinsic share price.
Practice Discounted Cash Flow Building - WebMD with interactive Excel modeling exercises in our DCF Modeling module.
This hands-on modeling exercise helps you master Discounted Cash Flow Building - WebMD through real-world Excel practice and financial modeling techniques.