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Exercise 26.1 - by Sule

The document provides a financial analysis including revenue, EBIT, tax rate, and various growth rates. It calculates Free Cash Flow (FCF) for five years and determines the terminal value and firm value using discounted cash flow (DCF) methods. The final firm value is estimated at approximately 2110.62 million.

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38 views4 pages

Exercise 26.1 - by Sule

The document provides a financial analysis including revenue, EBIT, tax rate, and various growth rates. It calculates Free Cash Flow (FCF) for five years and determines the terminal value and firm value using discounted cash flow (DCF) methods. The final firm value is estimated at approximately 2110.62 million.

Uploaded by

David logan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Rev 13,046

EBIT 391.38 MILL


TAX rate 36%
Beta 1.15
KD 5%
WACC 0 11.59%
WACC n 10.75%
KE 12.33%
Cap expenditur 475
Dep 461
Working cap 15% of rev
Growth for 5 ye 6%
Growth for afte 5%
Cap expenditure110% of dep
debt ratio after 10%
KD 4%

FCF= EBIT(1-T)(1+g) minus Capital Expentditure –Dep(1+g) minus WC is 15% of Rev(g)


265.512192 14.84 117.414
FCF1= 133.258192
FCF2= FCF1(1+G)^2 141.25368352
FCF3= FCF1(1+G)^3 149.7289045312
FCF4= FCF1(1+G)^4 158.712638803072
FCF5= FCF1(1+G)^5 168.235397131256
FCFterminal= EBIT(1-T)(1+6%)^5(1+5%) Capital Expentditure –Dep(1+g) Change in wc
351.963176249051 64.776809083728 130.93868164
FCFterminal= 156.247685525051
Terminal FCF terminal/(waccn-g terminal)
Value 2717.35105260959

FCF/(1+wacc0) FCF(1+wacc0)^2 FCF/(1+wacc0)^3 FCF/(1+wacc0)^4


DCF 119.417682588046 113.435561917133 107.753110164137 102.355315686

Terminal Value
FCFterminal= 351.963176249051 EBIT(1-T)(1+6%)^5(1+5%)
Capital Expend-Dep(1+g)
Capital
Expentditure 647.76809083728 Dep(1+5%)^5(1+6)
–Dep(1+g) 64.776809083728 712.544899921008 CapEX 110% of dep
Change in WC 130.938681640272 R(1+6%)^5-R(1+6%)^5*(1+5%)*15%
Terminal
Value 156.247685525051

DCF
FCF/(1+wacc0) 119.417682588046
FCF/(1+wacc0)^ 113.435561917133
FCF/(1+wacc0)^ 107.753110164137
FCF/(1+wacc0)^ 102.35531568598
FCF/(1+wacc0)^ 97.2279188342496
TV/(1+wacc0)^ 1570.43281076668
Firm Value 2110.62239995622
Workings
Year 1
EBIT(1-T)(1+g) EBIT(1-T)(1+6%)^5(1+5%)
265.512192

Capital Expend-Dep(1+g)
14.84 Dep(1+5%)^5(1+6)

WC is % of Rev(g) -Sir method My method


117.414 117.414

R(1+6%)^5-R(1+6%)^5*(1+5%)*15%

minus WC is 15% of Rev(g)

Change in wc

FCF/(1+wacc0)^5 TV/(1+wacc0)^Firm Value


97.22791883425 1570.4328108 2110.6224
Workings
Terminal Year
EBIT(1-T)(1+6%)^5(1+5%)351.963176249051

Capital Expend-Dep(1+g)
Dep(1+5%)^5(1+6) 647.76809083728
CapEX 110% of 712.544899921008
dep
Capital Expend-Dep(1+g) 64.776809083728

Change in wc
R(1+6%)^5-R(1+6%)^5*(1+5%)*15%
130.938681640272

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