Bigger Brewing Co.is a U.S.-based company that is undergoing a leveraged buyout with a projected capital structure of 80 percent debt in the near term.There is a projected loan repayment schedule,with the goal of having a capital structure of 50 percent debt in three years.Based on this information,the best methodology to value this firm would be the enterprise discounted cash flow methodology.

Question

Quizplus · Accepted Answer

Given the changing capital structure, the WACC will be changing constantly. Thus, a better methodology to use would be the adjusted present value (APV) method.