Bluntly Media Valuation

WACC calculation

For WACC, I assumed MRP as 5% and beta calculated from the exhibit 9 of the betas. For beta
calculation I have taken average unlevered beta which is given and for D/E ratio, I took average Debt and
average equity.

Formula to cal. Levered beta= unlevered beta*(1+ (1-tax)D/E ratio).

Risk free rate and cost of debt are given. For cost of equity I used CAPM model.

WACC= D/V*Kd(1-tax)+E/V*Ke = 5.7%

PV of the firm by FCFF

Assumed growth rate taken was 3%, as it should not be taken more than the industry growth, I can also
took max 3.2% not more than that.

Sales predicted on the basis of assumed growth rate.

Cost of sale, operating expenses, other current assets and depreciation predicted on the basis of the
average of previous years.

Working capital= current assets – current liabilities

Capex= change in Fixed Assets

FCFF= EBIT(1-tax) + depreciation – change in WC – Capex

PV of intermediate CF= PV of all the cash flows given @WACC calculated.

=NPV(B53,F38:J38)

PV of Terminal Value =K39/((1+B53)^6), this is for 6 years @WACC calculated for the calculated
TV.
So, PV of the firm calculated by adding PV of Intermediate CF and PV of Terminal Value.
PV of the Firm= ₹ 22,359.15