Steps:

1. Project unlevered free cash flow (UFCF) for 5–10 years: $\text{UFCF}=\text{EBIT}(1-t)+\text{D\&A}-\text{CapEx}-\Delta \text{NWC}$
2. Calculate a terminal value at the end of the projection period, using either:
   • Gordon Growth: $TV=\frac{{\text{UFCF}}_{\text{final}}\times (1+g)}{\text{WACC}-g}$
   • Exit Multiple: $TV={\text{EBITDA}}_{\text{final}}\times \text{EV/EBITDA multiple}$
3. Discount all cash flows and TV back to present: $\text{Enterprise Value}={\sum }_{t=1}^n\frac{{\text{UFCF}}_t}{(1+\text{WACC}{)}^t}+\frac{TV}{(1+\text{WACC}{)}^n}$
4. Bridge to equity value: $\text{Equity Value}=\text{EV}-\text{Net Debt}-\text{Minority Interest}-\text{Preferred Stock}+\text{Associates}$
5. Divide by diluted shares → price per share

Key sensitivity: Small changes in WACC or terminal growth rate (g) swing value dramatically, which is why you always present a sensitivity table on those two inputs.

Steps:

1. Select a peer universe (same industry, similar size/margins/growth)
2. For each peer, calculate trading multiples:
   • $\text{EV/EBITDA}=\frac{\text{Enterprise Value}}{\text{EBITDA}}$
   • $\text{EV/Revenue}$, $\text{P/E}$, etc.
3. Derive a range (typically 25th–75th percentile or mean/median)
4. Apply that multiple range to the target's corresponding metric:
   • $\text{Implied EV}=\text{Target EBITDA}\times \text{Selected Multiple}$
5. Bridge to equity value per share as above

Produces a value anchored to current market sentiment — if the market is overheated, comps will be high.

Steps:

1. Identify relevant closed transactions (same sector, recent vintage)
2. Calculate transaction multiples: $\frac{\text{Deal EV}}{\text{Target LTM EBITDA}}$, etc.
3. Derive a range and apply to target's metrics — same math as comps

Key difference from comps: Precedent multiples include a control premium (typically 20–40% above unaffected trading price), so precedent values usually come in higher than comps.