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FCF-WACC

0 1 2
revenue 20000 24000
EBIT 2000 3600
% on Rev 10% 15%
INT -576 -616
EBT 1424 2984
Tax 498.4 1044.4
% of EBT 35% 35%
Net Earnings 925.6 1939.6

Invested Capital 12000 13200


% of Rev 60% 55%

Debt 9000 9631 10381

EBIT 2000 3600


Tax 35% 35%
Tax 700 1260
NOPAT 1300 2340
change in Cap 0 1200
FCF 1300 1140
INT -576 -616
Tax shield 201.6 215.6
change in Debt 631 750
Residual CF(Div) 1556.6 1489.6

MV of Debt 9000 9631 10381


MV of Eq 21100.33445 22579.70234 24338.06355
Enterprice Value 30100.33445 32210.70234 34719.06355
% of Debt 29.90% 29.90% 29.90%
% of Eq 70.10% 70.10% 70.10%

Tax 35% 35% 35%


Bd 0.3 0.3 0.3
Kd 6.40% 6.40% 6.40%
Rf 4% 4% 4%
Rm 8% 8% 8%
D/E 0.420534459 0.420534459 0.420534459
Bu 1 1 1
Bl 1.298573466 1.298573466 1.298573466
Keu 12% 12% 12%
Kel 14.3886% 14.3886% 14.3886%
WACC 11.330240% 11.330240% 11.330240%
Enterprice value 30100.33445 32210.70234 34719.06355
Debt 9000 9631 10381
Eq Value 21100.33445 22579.70234 24338.06355

APV (@Ku)
0 1 2
FCF 1300 1140
terminal value
Tax Shield 201.6 215.6
Tx shld(1-6) 957.21338 Pv of Tax shield 180 171.875
Tx shld(6-) 1130.42069 Pv of FCF@Ku $8,883.17
PV of Terminal value 19126.33809
enterprice value $30,097.14
Debt 9000
Eq value $21,097.14

ECF (@Ke)
Cash flow to equity 1556.6 1489.6
Terminal value
Total cash flow 1556.6 1489.6
Equity value $21,096.33

EVA (@WACC)
NOPAT 0 1300 2340
Inevstment 12000 12000 13200
WACC 11.33% 11.33%
ROIC 10.83% 19.50%
EVA=(WACC-ROIC)*INV -59.6288 980.3712
EVA=NOPAT-INV*WACC -59.6288 980.3712

-53.560406 790.9811366
PV of EVA @WACC $6,249.29
Pv of Terminal Value 11848.61824
Initial capital 12000
enterprice value $30,097.91
Debt 9000
Eq Value $21,097.91

EVA (@Ku)
NOPAT 0 1300 2340
Inevstment 12000 12000 13200
Cost of equity unlevered 12.00% 12.00%
ROIC 10.83% 19.50%
EVA=(Ku-ROIC)*INV -140 900
EVA=NOPAT-INV*Ku -140 900

-125 717.4744898
PV of EVA @Ku $5,710.71
Pv of Terminal Value 10298.79743
Initial capital 12000
Pv of Tax shield(yr 1-6) 957.2133803
Pv of Tax shield(yr aft 6) 1130.420689
enterprice value $30,097.14
Debt 9000
Eq Value $21,097.14

SVA 0 1 2
NOPAT 0 1300 2340
change in NOPAT 1040
change in NOPAT/WACC 9178.975909
(chnge in NOPAT/WACC)/
(1+WACC)^(t-1) 8244.818217
Investment -1200
PV of Investment -968.1816071
SVA 7276.63661
cumulated SVA 7276.63661
Baseline value 11474
enterprice value 30097.7021
Debt 9000
Eq value 21097.7021

CCF 0 1 2
equity cash flow 1556.6 1489.6
terminal value
total eq cash flow 1556.6 1489.6
Interest expanse 576 616
change in debt -631 -750
terminal value of debt
total debt cash flow -55 -134
total cash flow 1501.6 1355.6
Pre Tax WACC 12% 12%

PV of cash flow 1340.714286 1080.67602


Enterprice value 30096.67581
Debt 9000
Eq value 21096.67581
3 4 5 6
28800 31680 34848 34848
4320 6336 6969.6 6969.6
15% 20% 20% 20%
-664 -709 -738 -765
3656 5627 6231.6 6204.6
1279.6 1969.45 2181.06 2171.61
35% 35% 35% 35%
2376.4 3657.55 4050.54 4032.99

14400 15840 17424 17424


50% 50% 50% 50%

11077 11531 11956 11956

4320 6336 6969.6 6969.6


35% 35% 35% 35%
1512 2217.6 2439.36 2439.36
2808 4118.4 4530.24 4530.24
1200 1440 1584 0
1608 2678.4 2946.24 4530.24
-664 -709 -738 -765
232.4 248.15 258.3 267.75
696 454 425 0
1872.4 2671.55 2891.54 4032.99

11077 11531 11956 11956


25969.82274 27034.21739 28030.62207 28030.62207
37046.82274 38565.21739 39986.62207 39986.62207
29.90% 29.90% 29.90% 29.90%
70.10% 70.10% 70.10% 70.10%

35% 35% 35% 35% 35%


0.3 0.3 0.3 0.3
6.40% 6.40% 6.40% 6.40%
4% 4% 4% 4%
8% 8% 8% 8%
0.420534459 0.420534459 0.420534459 0.420534459
1 1 1 1
1.298573466 1.298573466 1.298573466 1.298573466
12% 12% 12% 12%
14.3886% 14.3886% 14.3886% 14.3886%
11.330240% 11.330240% 11.330240% 11.330240%
37046.82274 38565.21739 39986.62207 39986.62207
11077 11531 11956 11956
25969.82274 27034.21739 28030.62207 28030.62207

3 4 5 6
1608 2678.4 2946.24 4530.24
37752 2231.25
232.4 248.15 258.3 267.75 1130.4207
165.4177296 157.7038112 146.5663568 135.6504827

1872.4 2671.55 2891.54 4032.99


28026.33773
1872.4 2671.55 2891.54 32059.32773

2808 4118.4 4530.24 4530.24


14400 15840 17424 17424
11.33% 11.33% 11.33% 11.33%
21.27% 28.60% 28.60% 26.00%
1312.40832 2486.84544 2735.529984 2556.058982
1312.40832 2486.84544 2735.529984 2556.058982
22560.09693
951.1135037 1618.825206 1599.485967 1342.448447

2808 4118.4 4530.24 4530.24


14400 15840 17424 17424
12.00% 12.00% 12.00% 12.00%
21.27% 28.60% 28.60% 26.00%
1224 2390.4 2629.44 2439.36
1224 2390.4 2629.44 2439.36
20328
871.2190233 1519.142415 1492.014872 1235.855692

3 4 5 6
2808 4118.4 4530.24 4530.24
468 1310.4 411.84 0
4130.539159 11565.50964 3634.87446 0

3332.578999 8381.569282 2366.120372 0


-1200 -1440 -1584 0
-869.6502354 -937.3756242 -926.1772987 0
2462.928764 7444.193657 1439.943073 0
9739.565374 17183.75903 18623.7021 18623.7021

3 4 5 6
1872.4 2671.55 2891.54 4032.99
28026.33773
1872.4 2671.55 2891.54 32059.32773
664 709 738 765
-696 -454 -425 0
11956
-32 255 313 12721
1840.4 2926.55 3204.54 44780.32773
12% 12% 12% 12%

1309.960368 1859.875432 1818.342056 22687.10765


WACC
0 1 2 3 4
Revenue 20000 24000 28800 31680
EBIT 2000 3600 4320 6336
% on Rev 10% 15% 15% 20%
INT -576 -484 -406 -307
EBT 1424 3116 3914 6029
Tax -498.4 -1090.6 -1369.9 -2110.15
% on EBT 35% 35% 35% 35%
Net Earnings 925.6 2025.4 2544.1 3918.85

Inested Capital 12000 13200 14400 15840


% on Revenues 60% 55% 50% 50%
Debt 9000 8074 7249 5905 3426
Shareholders' capital 3000 3000 3000 3000 3000
Retained Earnings 0 0 925.6 2951 5495.1
Net Earnings 0 925.6 2025.4 2544.1 3918.85
Shareholders' Equity 3000 3925.6 5951 8495.1 12413.95
Financial Resources 12000 11999.6 13200 14400.1 15839.95

EBIT 2000 3600 4320 6336


Tx on EBIT -700 -1260 -1512 -2217.6
NOPAT 1300 2340 2808 4118.4
change in invested capital 0 -1200 -1200 -1440
Free cash flow 1300 1140 1608 2678.4
Int Expense -576 -484 -406 -307
Tax shield 201.6 169.4 142.1 107.45
FCFE 925.6 825.4 1344.1 2478.85

Tax 35% 35% 35% 35% 35%


Debt Beta 0.3 0.25 0.2 0.15 0.1
Kd 6.40% 6.00% 5.60% 5.20% 4.80%
Rf 4% 4% 4% 4% 4%
MRP 8% 8% 8% 8% 8%
Unlevered Beta 1 1 1 1 1
Ke 12.00% 12.00% 12.00% 12.00% 12.00%

EVA with WACC


Initial capital 12000 12000 13200 14400 15840
NOPAT 0 1300 2340 2808 4118.4
ROIC= 0 0.108333 0.177273 0.195 0.26
EVA=(WACC-ROIC)*INV
EVA=NOPAT-INV*WACC
TV of EVA
PV of EVA
Market value added
Initial capital
Enterprice value
Debt
Eq value
Calculating WACC when tax shield are dicounted at Kd
5 6
34848 34848 Kue 12.00% 12.00% 12.00% 12.00% 12.00% 12.00%
6969.6 6969.6 Kd 6.40% 6.00% 5.60% 5.20% 4.80% 4.00%
20% 20% D 9000 8074 7249 5905 3426 587
-164 -23 E
6805.6 6946.6
-2381.96 -2431.31 APV
35% 35% Unleverd F 0 1300 1140 1608 2678.4
4423.64 4515.29 PV of Unlevered FCF 1226.415 1022.297 1381.144 2220.395
Terminal value
17424 17424 Tax shield in Terminal value
50% 50% Int tax shield 201.6 169.4 142.1 107.45
587 587 PV of INT Tx Shld 190.1887 151.9097 122.0526 89.07612
3000 3000 PV of FCF 1-6 11852.16
9413.95 9321.71 PV of Terminal value 29835.95
4423.64 4515.29 18.17723
16837.59 16837
17424.59 17424

6969.6 6969.6
-2439.36 -2439.36
4530.24 4530.24
-1584 0
2946.24 4530.24
-164 -23
57.4 8.05
2839.64 4515.29

35% 35%
0 0
4.00% 4.00%
4% 4%
8% 8%
1 1
12.00% 12.00%

17424 17424
4530.24 4530.24
0.26 0.26
12.00%
4.00%
587

2946.24 4530.24
2421.595 3580.314
37752 191.6667
23
57.4 8.05
47.17862 6.362032
0 1 2 3 4 5 6
Debt outstanding 38.4 38.4 38.4 38.4 38.4 38.4 25.6
15% Interest @15% 5.76 5.76 5.76 5.76 5.76 5.76
EBIT 11.5 11.5 11.5 11.5 11.5 11.5 11.5
Interest 0 5.76 5.76 5.76 5.76 5.76 5.76
PBT 11.5 5.74 5.74 5.74 5.74 5.74 5.74
Tax 4.025 2.009 2.009 2.009 2.009 2.009 2.009
PAT 7.475 3.731 3.731 3.731 3.731 3.731 3.731
plus Interest 0 5.76 5.76 5.76 5.76 5.76 5.76
plus Depreciation 8 8 8 8 8 8 8
Less Capital charges 1 1 1 1 1 1 1
CCF 14.475 16.491 16.491 16.491 16.491 16.491 16.491
17% CCF @ pre Tax WACC -64 14.09487 12.0469 10.29649 8.800423 7.521729 6.428828
NPV 4.773662
7 8 0 1 2 3 4
12.8 0 Debt outstanding 38.4 38.4 38.4 38.4
3.84 1.92 Interest @15% 5.76 5.76 5.76 5.76
11.5 11.5 Principal repayment 0 0 0 0 0
3.84 1.92 Loan at the end 38.4 38.4 38.4 38.4 38.4
7.66 9.58 Interest Tax Shield 2.016 2.016 2.016 2.016
2.681 3.353 PV of ITS@15% 1.753043 1.524386 1.325553 1.152655
4.979 6.227 PV of ITS@17% 1.723077 1.472715 1.258731 1.075838
3.84 1.92
8 8
1 1
15.819 15.147
5.270818 4.313599
5 6 7 8
38.4 25.6 12.8 0
5.76 5.76 3.84 1.92
0 12.8 12.8 12.8
38.4 25.6 12.8 0
2.016 2.016 1.344 0.672
1.002308 0.871572 0.505259 0.219678 8.354454
0.91952 0.785915 0.447815 0.191374 7.874985

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