concern of having the cost of equity and cost of debt in mind the overall the

Concern of having the cost of equity and cost of debt

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Equity Risk Premium A B C D E F G 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35
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Q2-Equity Valuation Page 7 FREE-CASH-FLOW VALUATION OF EQUITY USE ANSWER BOXES BELOW STARTING AT ROW 68 Assumptions: PERIOD 2005 2006 2007 2008 2009 2010 YEAR 0 1 2 3 4 5 Profit from operations (EBIT) 20173.0 23238.0 26757.0 30785.0 30785.0 no growth in 2010 Income tax rate 35.0% 35.0% 35.0% 35.0% 35.0% Depreciation & amortization expense 600.0 1200.0 1800.0 2400.0 2400.0 Net working capital from balance sheet forecast 0.0 2326.0 2434.0 2996.0 3690.0 3690.0 Capital expenditures 3600.0 3600.0 3600.0 3600.0 3600.0 Long-term growth rate 5.0% enter this Wt-Avg. C of C (K-wacc) 13.4% enter this Market Value of Debt 0.0 Number of Shares 0.0 not applicable Redundant Assets 0.0 not applicable PERIOD 2005 2006 2007 2008 2009 2010 YEAR 0 1 2 3 4 5 EBIT after tax (EBIAT) 13112.5 15104.7 17392.1 20010.3 20010.3 + Depreciation 600.0 1200.0 1800.0 2400.0 2400.0 =Cash Flow from Operations (CFFO) 13712.5 16304.7 19192.1 22410.3 22410.3 +/- Change in Net Working Capital (2326.0) (108.0) (562.0) (694.0) 0.0 +/- Capital Expenditures (3600.0) (3600.0) (3600.0) (3600.0) (3600.0) =Free Cash Flow (FCF) 7786.5 12596.7 15030.1 18116.3 18810.3 +Terminal Value (TV) 236536.1 =Sum of FCF + TV 7786.5 12596.7 15030.1 18116.3 255346.3 Present Value 174433.7 - Market Value of Debt 0.0 = Valuation of Equity 174433.7 +Redundant assets 0.0 =Adjusted Value of Equity 174433.7 / Number of Shares 0.0 Value of Equity per Share #DIV/0! MARKET MULTIPLES (COMPARABLES) VALUATION OF EQUITY Average Market Multiples of Peers Peer A Peer B Peer C Peer D Peer E Mkt Mult Price /revenue market multiple of peer company 0.0 0.0 0.0 0.0 0.0 0.0 do not use Price/EBITDA market multiple of peer company 5.0 5.0 5.0 5.0 5.0 5.0 use this one Price /Earnings market multiple of peer company 0.0 0.0 0.0 0.0 0.0 0.0 do not use Mkt Val of Eq/Book Val mkt mult of Equity of peer 0.0 0.0 0.0 0.0 0.0 0.0 do not use Target company data Target company revenue 0.0 do not use adjust function Target company EBITDA 14107.0 enter the number if less than 5 Target company earnings (net income) 0.0 do not use peers Target company book value of equity 0.0 do not use Target company number of shares 0.0 not applicable from col B from Col G BxC C/B55 Target Co Average Aggregate Per Share Valuation Calculations Data Mkt Mult Valuation Valuation Valuation based on avg revenue market multiple 0.0 0.0 0.00 #DIV/0! Valuation based on avg EBITDA market multiple 14107.0 5.0 70535.00 #DIV/0! Valuation based on avg earnings market multiple 0.0 0.0 0.00 #DIV/0! Valuation based on avg book value market multip 0.0 0.0 0.00 #DIV/0! Summary map FREE CASH FLOW MODEL REVENUE MARKET MULTIPLE EBITDA MARKET MULTIPLE EARNINGS MARKET MULTIPLE BOOK VALUE MARKET MULTIPLE CURRENT MARKET PRICE
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