Page 1

INPUTS FOR VALUATION

Current Inputs
Base Year Revenue
Enter current capital invested in the firm =
Enter the current depreciation =
Enter the current capital expenditures for the firm =
Enter the change in Working Capital in last year =
Enter the value of current debt outstanding =
Enter the number of shares outstanding =

Assumptions
$
12,406
$
614,300
$
233
$
298
$
115
$ 6,000,000
95,800.00

Growth Rate
Debt to use for EFN
Corporate Tax Rate
Calulcated Beta
LT Bond Rate
Market Risk Premium
Cost of Borrowing Money

ESTIMATED CASHFLOWS
Base
Growth in Revenue
Growth in Deprec'n
Revenues

5.03%

5.03%

5.03%

5.03%

5.03%

5.03%

5.03%

5.03%

5.03%

######

###### $ 15,856

5.03%
###### $

13,030

13,685

17.15

0.86

13,668

######

###### $ 15,856

43.11%

43.11%

43.11%

Operating Expenses
- $ Operating Expenses

$ 6,777

EBIT

$ 5,629

Tax Rate

340.88
$

12,689

0.00%

43.11%

0.04

0.00

43.11%

EBIT (1-t)

$ 5,629

7,219

7,776

$ 8,177

$ 8,589

$ 9,021

+ Depreciation

233

245

- Capital Expenditures

298

298

257

270

284

298

298

298

298

298

- Change in WC

115

31.39

32.97

$ 34.63

$ 36.37

$ 38.20

= FCFF

$ 5,449

7,134

7,702

$ 8,114

$ 8,538

$ 8,982

Terminal Value (in '05)

#######
COSTS OF EQUITY AND CAPITAL
1

Cost of Equity

15.94%

15.94%

15.94%

15.94%

15.94%

Proportion of Equity

45.00%

45.00%

45.00%

45.00%

45.00%

After-tax Cost of Debt

6.00%

6.00%

6.00%

6.00%

6.00%

Proportion of Debt

55.00%

55.00%

55.00%

55.00%

55.00%

Cost of Capital

10.47%

10.47%

10.47%

10.47%

10.47%

122.05% 134.83% 148.95%

164.55%

Cumulative WACC

110.47%

Page 1

5%
55%
43%
1.54
3%
11%
6%

Page 2

Present Value

6,458

6,311

$ 6,018

$ 5,732

FIRM VALUATION
Value of Firm

$ 13,527,572.24

- Value of Debt

6,000,000

Value of Equity

7,527,572

78.58

Number of Shares
Value of Equity per Share

Page 2

#######

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EVA Valuation

EBIT (1-t)
$
- WACC (CI)
EVA
Terminal EVA
PV
PV of EVA
+ Capital Invested
$
+ PV of Chg Capital in Yr 10
= Firm Value

Base
5,629

Cumulated WACC

1
7,219 $
64,345 $
(57,126) $

2
7,776 $
64,354 $
(56,578) $

3
8,177 $
64,362 $
(56,185) $

4
8,589 $
64,368 $
(55,780) $

5
9,021
64,374
(55,353)

(51,710) $

(46,358) $

(41,671) $

(37,448) $

(33,638)

#REF!
614,300
#REF!
This reconciles the assumptions on stable growth, ROC and Capital Invested

#REF!

WACC
ROC
Capital Invested
Calculation of Capital Invested
Initial
$
+ Net Cap Ex
+ Chg in WC
Ending
$

$
$
$

614,300

614,300

10.47%
1.18%
614,300 $

10.47%
1.27%
614,385 $

10.47%
1.33%
614,459 $

10.47%
1.40%
614,521 $

10.47%
1.47%
614,572

$
$
$
$

614,300
53
31
614,385

614,385
41
33
614,459

614,459
28
35
614,521

614,521
14
36
614,572

614,572
0
38
614,611

$
$
$
$

110.47%

Page 5

122.05%

$
$
$
$

134.83%

$
$
$
$

148.95%

$
$
$
$

164.55%

EVA Valuation
#REF!
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Terminal Year
#REF!
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$
614,611

#REF!
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#REF!
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614,611
#REF!
#REF!
#REF!

#REF!
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apital Invested

Page 6

(Adjusted to reflect terminal ROC)

EVA Valuation

Adjusted to reflect terminal ROC)

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