fcffst - FCFF Stable Model FCFF STABLE GROWTH MODEL This...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
FCFF Stable Model Page FCFF STABLE GROWTH MODEL This model is designed to value a stable firm on the basis of free cashflows to firm. Assumptions in the model: 1. The firm is in steady state and will grow at a stable rate forever. 2. The firm's leverage is known and constant. User defined inputs The user has to define the following inputs to the model: 1. Current EBIT and tax rate 2. Capital Spending and Depreciation 3. Change in working capital 4. Debt ratio 5. Cost of Equity or Inputs to the CAPM (Beta, Riskfree rate, Risk Premium) and Cost of Debt 6. Expected Growth Rate in free cashflows to firm forever.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
FCFF Stable Model Page Please enter inputs to the model: Current EBIT $1,535.00 (in currency) Current tax rate = 36% Capital Expenditures $550.00 (in currency) Depreciation = $400.00 (in currency) Change in Working Capital = $160.00 (in currency) If negative, enter zero. Do you want to change the capital expenditure/depreciation ratio? Yes (Yes or No) If so, enter capital expenditures as a percent of depreciation
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 06/28/2010 for the course MKTG 00HP01 taught by Professor Himanshu during the Spring '10 term at Indiana Institute of Technology.

Page1 / 5

fcffst - FCFF Stable Model FCFF STABLE GROWTH MODEL This...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online