As implied by the formula itself, if a company does not have interest-bearing debts, then its WACC would equal to its cost of equity. This is exactly the case of Chipotle. As December of 2016, Chipotle had no interest-bearing debt and $417.7 million in cash and short-term investments in its balance sheet. These cash and short-term investments, along with cash

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The enterprise value (EV) measures the total value of the company. It can be defined as the sum of the present value of the projected free cash flows (FCF) during the forecast period and the present value of the terminal value after the forecast period. The mathematical formula is as follows:

Gathering all the data estimated above and applying this formula of enterprise value to the case of Chipotle, the end result is the following:

As shown the equation above, the enterprise value of Chipotle is $12,797 million. From this enterprise value, it becomes possible to deduce the fair equity value, since the enterprise value is also defined as the sum of the equity value and the net debt. As December 2016, Chipotle had no interest-bearing debt, and the company had $88 million in cash and $330 million in short-term investments (CMG, 2017). Based all these information, the fair equity value of Chipotle is $13,215 million, as calculated in the next graph. Moreover, considering that Chipotle had 29.77 million diluted average common shares outstanding as December 2016 (CMG, 2017), then a single share of Chipotle should be worth $443.90. As the conclusion, according the discounted cash flow valuation method, the fair equity value of Chipotle is $443.90 per