DCF spreadsheet example - Time Sales EBIT EBIT(1-t)...

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DCF ANALYSIS: EXAMPLE 1. Cash flow assumptions: Explanation Sales n/a Depreciation see below given Working capital change see below given Capital expenditures see below given Tax rate 40.0% given 2. Discount rate WACC (Kc) assumptions: Weight of debt -- Wd n/a Weight of equity -- We n/a Cost of debt -- Kd (before-tax) n/a Cost of debt -- Kd (after-tax) n/a Risk-free rate -- Rf n/a Beta (B) n/a Market risk premium (MRP) n/a Cost of equity -- Ke n/a WACC (Kc) 10.0% given 3. Terminal value assumptions: FCF terminal growth 3.0% given Cash Flows: Terminal Discounted Year
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Unformatted text preview: Time Sales EBIT EBIT(1-t) +Dep-Cap Ex - WC chg Subtotal Value* Total Value 2002 1 n/a 40.0 24.0 4.0 6.0 2.0 20.0 20.0 18.2 2003 2 n/a 50.0 30.0 5.0 7.0 3.0 25.0 25.0 20.7 2004 3 n/a 60.0 36.0 6.0 8.0 4.0 30.0 441.4 471.4 354.2 TOTAL = 393.0 PV Assets 393.0 *Terminal Value:perpetuity calculation assumptions Less: Debt 100 WACC Kc = 10.0% PV Equity 293.0 FCF terminal growth g = 3.0% shares o/s n/a FCF2005 = FCF2004*(1+g) FCF2005= 30.9 Price/share n/a--> TV = FCF2005/(Kc - g)...
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This note was uploaded on 05/09/2011 for the course BUSI 408 taught by Professor Zeighamkhokher during the Spring '11 term at University of North Carolina School of the Arts.

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