Chs9-11PDCFirmValuationlModels - PDC COMPANY Valuation...

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Unformatted text preview: PDC COMPANY Valuation Models (Chapters 9-11) NOTES: In regards to using these spreadsheets: 1) Chapter 9's equity valuations are contained in "PreMDM", "PrePDM" and "PreDDA" where the proceeds of any offering are not placed on the initial balance sheet. 2) Chapter 10's Learning Supplement 10A's extensive example of a post-money approach (where the proceeds are placed on the balance sheet) is in the worksheet titled "PostPDM." 3) Chapter 10's Learning Supplement 10A's example of a post-money DDA (p. 379ff) is contained in the worksheet titled "PostDDA." 4) Each worksheet also contains the "Enterprise Method" valuations discussed in Chapter 11. Equity Valuation Year 1 Year 2 Year 3 Year 4 Year 5 Year T=6 Year 7 4/1/Y0-7/31/Y0 8/1/Y0-7/31/Y1 8/1/Y1-7/31/Y2 8/1/Y2-7/31/Y3 8/1/Y3-7/31/Y4 8/1/Y4-7/31/Y5 8/1/Y5-7/31/Y6 8/1/Y6-7/31/Y7 Net Income 6,372 43,277 53,225 75,273 107,669 147,688 124,151 131,601 +Depreciation and Amortization 4,600 5,796 5,630 6,800 9,520 13,600 18,700 19,822-Capital Expenditures-6,900-4,140-17,326-34,000-50,320-64,600-29,920-31,715-Change in Net Working Capital 2,415 20,470-21,404-49,778-74,667-93,333-20,533-21,765 +Debt Proceeds 419,991 25,199 26,711 Equity VCF (Valuation Cash Flow) 6,487 65,403 20,125-1,704-7,797 423,346 117,598 124,653 (vs. Dividends - Equity Issues) 6,487 65,403 20,125-1,704-7,797 423,346 117,598 124,653 Today EOY 1 EOY 2 EOY 3 EOY 4 EOY 5 EOY 6=T EOY 7 Valuation Date 7/31/Y0 7/31/Y1 7/31/Y2 7/31/Y3 7/31/Y4 7/31/Y5 7/31/Y6 7/31/Y7 PV Equity (End of Period) 520,978 585,819 712,149 891,891 1,122,661 979,980 1,038,779 1,101,105 NPV Equity (Including Current Flows) 527,465 651,222 732,274 890,186 1,114,864 1,403,326 1,156,376 1,225,759 Enterprise Valuation EBIT (Earnings Bef. Int. and Taxes) 7,360 61,824 76,036 107,533 153,813 210,983 219,358 232,520-tax rate*EBIT (except year 0)-18,547-22,811-32,260-46,144-63,295-65,808-69,756 EBIAT (Earnings Bef. Int. After Taxes) 7,360 43,277 53,225 75,273 107,669 147,688 153,551 162,764 +Depreciation and Amortization 4,600 5,796 5,630 6,800 9,520 13,600 18,700 19,822-Capital Expenditures-6,900-4,140-17,326-34,000-50,320-64,600-29,920-31,715-Change in Net Working Capital 2,415 20,470-21,404-49,778-74,667-93,333-20,533-21,765 Enterprise VCF (Valuation Cash Flow) 7,475 65,403 20,125-1,704-7,797 3,355 121,798 129,105 Today EOY 1 EOY 2 EOY 3 EOY 4 EOY 5 EOY 6=T EOY 7 Valuation Date 7/31/Y0 7/31/Y1 7/31/Y2 7/31/Y3 7/31/Y4 7/31/Y5 7/31/Y6 7/31/Y7 Long Term Debt / Market Value of Equity 0.0% 0.0% 0.0% 0.0% 0.0% 30.0% 30.0% After-tax WACC (Wtd. Avg. Cost of Cap.) 25.0% 25.0% 25.0% 25.0% 25.0% 14.7% 14.7% PV Enterprise (End of Period) 520,978 585,819 712,149 891,891 1,122,661 1,399,971 1,483,970 1,573,008 Capital Gain on Market Value of Enterprise 12.4% 21.6% 25.2% 25.9% 24.7% 6.0% 6.0% Yield on Market Value of Enterprise 12.6% 3.4%-0.2%-0.9% 0.3% 8.7% 8.7% Total Return on Market Value of Enterprise 25.0% 25.0% 25.0% 25.0% 25.0% 14.7% 14.7%-Market Value of Debt (End of Period)-419,991...
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This note was uploaded on 06/01/2008 for the course BUSM 1317 taught by Professor Simon during the Three '08 term at Royal Melbourne Institute of Technology.

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Chs9-11PDCFirmValuationlModels - PDC COMPANY Valuation...

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