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Good evening, Sir.
I notice there is FCFE multiplier in Selorne. Could Sir kindly explain the purpose of this multiplier as I do not understand its concept.
I would appreciate it if Sir is willing to allocate your time on explaining this question.
Thanks and stay safe.
You will have to be specific as to which multiplier you are referring to.
For Chawon we are using the growth formula from the formula sheet because we are discounting a growing perpetuity.
For the total company valuation we are multiplying by 8 because the question specifically states that the share value is a multiple of 8 of the free cash flows (and so is effectively a PE valuation).
I do explain both of these approaches in my free lectures.