r_wacc 10% r_wacc

Debt 50
Cash 20
Number of shares 5

Year 1 2 3 Year
EBITDA 10 12 14.4 EBITDA
growth rate from prior year 20% 20% growth rate from prior
Free Cash Flows (@ 80% EBITDA) 8 9.6 11.5 Free Cash Flows (@
TV (8x 〖EBITDA〗_3 ) = 115.2 TV (8x 〖EBITDA

PV of FCF (@ r_wacc = )= 7.3 7.9 95.2 PV of FCF (@ r_wacc =

EV (PV of FCF + TV) = 110.4 EV (PV of FCF + TV) =

P_0 = (EV - Debt + Cash)/#shares 16.08 P_0 = (EV - Debt + Ca

2014 2015
Year 1 2
FCF ($ million) $ 43.00 $ 50.00
$ 962.96 <- TV
PV $39.31 $846.37
r 9.40%
g 4.00%

EV $885.67
TV calc $ 962.96

Debt $ 26.00
Excess cash $ 108.00
Net Debt $ 82.00
Equity Value $967.67
Shares 50
S Price $ 19.35
 Given
g 0.02
t 0.4
r(f) 0.02
MRP 0.05
B€ 1.4
1 2 3 B(d) 0.6
10 12 14.4 D/E 0.333333
growth rate from prior year 20% 20% Shares 80
Free Cash Flows (@ 8 9.6 11.5 r€ 0.09
TV (8x 〖EBITDA〗_3 ) = 115.2 r(D) 0.05
r_wacc 0.075
PV of FCF (@ r_wacc = 7.3 7.9 95.2

EV (PV of FCF + TV) = 110.4 share

D 1 0.25
P_0 = (EV - Debt + Ca #DIV/0! E 3 0.75
D/E 0.333333
2014 2015
Year 1 2 3
FCF ($ mill $ 50.00 $ 60.00 $ 70.00 $ 1,368.18
$ 1,298.18 <- TV
PV $46.51 $51.92 $1,101.33
r 7.50%
g 2.00%

EV $1,199.76
TV calc $ 1,298.18

Debt $ 250.00
Excess cas $ 50.00
Net Debt $ (200.00)
Equity Val $999.76
Shares 80
S Price $ 12.50