Reviews, through a rather simple and straightforward situation, the various methods of valuation--free cash flow, weighted average cost of capital, equity cash flow, adjusted present value, multiples, etc.
Cost of Capital Calculations
DCF Valuation Method
Multiples Valuation Method
Prepare a five-year forecast of the Free Cash Flows for LMC.
Use DCF to value the company based on your five-year forecasts plus terminal value.
Compare your DCF value to two or more multiples approach based on such multiples as earnings, EBIT, EBITDA, Sales, etc.