Particulars 2010 2011

Total Equity
Share capital 113 113
Retained Earnings 1128 1801

Net Equity 1241 1914

Total Debt
Total Long term liabilites 59 163
Current debt 931 1436

Net Debt 990 1599

Total Equity 1242 1915

Total Debt 990 1599
Total Capital 2232 3514

Cost of equity = Risk free rate of return + Beta × (market rate of return – risk free rate of return)=

Beta = 0.95
Rf= 8.84%
Rm= (0.0884+0.05)*0.95 = 0.131

Cost of Debt = Effective rate of return * (1- tax rate) =

Effective rate of return = (1+i/n)^n -1

Where n = 8.84%
i= no. of years = 5

So, Effective rate of return =0.092

NOPAT = Operating profit x (1 - Tax Rate)

COCE = WACC * Average Capital employed
Total Op profit
 2012 2013 2014 mean

113 114 117 285

2739 3841 5737 7623

2852 3955 5854 7908

359 239 301 560.5

1693 2481 1334 3937.5

2052 2720 1635 4498

Weights
Mean Weight 2010 2011
2853 3955 5853 7623 0.63 0.556452 0.544963
2052 2720 1635 4498 0.37 0.443548 0.455037
4905 6675 7488 12121

– risk free rate of return)= 0.1289

WACC = (Cost of Equity * the p

0.0644

Year Equity Debt

2010 0.56 0.44
2011 0.54 0.46
2012 0.58 0.42
2013 0.59 0.41
2014 0.78 0.22
(7759/5)*0.7 = 1086.26
12121*0.105 = 1272.71

Year Op. Profit 1-Tax rate NOPAT Year WACC

2010 785 0.7 549.5 2010 0.1
2011 1296 0.7 907.2 2011 0.09
2012 1804 0.7 1262.8 2012 0.1
2013 2144 0.7 1500.8 2013 0.1
2014 1730 0.7 1211 2014 0.11
Total Op profit 7759 5431.3

Year NOPAT COCE WACC EVA

2010 549.5 104.4 0.1 539.06
2011 907.2 142.04 0.09 894.4164
2012 1262.8 238.4 0.1 1238.96
2013 1500.8 340.4 0.1 1466.76
2014 1211 539.44 0.11 1151.6616

EVA = NOPAT-(T.A-T.L) * WACC 1086.26-1272.21 = -186.445

 2012 2013 2014 Net Mean
0.58165138 0.5925093633 0.78165064103 3.0572259985 0.6114452
0.41834862 0.4074906367 0.21834935897 1.9427740015 0.3885548

WACC = (Cost of Equity * the portion of Equity in the capital structure) + (Cost of Debt * Portion of the debt in cap structure)

WACC = (0.1289*0.63) + (0.0644*0.37) = 0.105

Cost of Equity Cost of Debt A(Ke*Equity) B(Kd*Debt) WACC

0.1289 0.0644 0.072184 0.028336 0.10052
0.1289 0.0644 0.069606 0.029624 0.09923
0.1289 0.0644 0.074762 0.027048 0.10181
0.1289 0.0644 0.076051 0.026404 0.102455
0.1289 0.0644 0.100542 0.014168 0.11471

A.C.E COCE
1044 104.4
1578.2 142.038
2384 238.4
3404 340.4
4904 539.44
bt in cap structure)