4.

What is Lady M's Enterprise Value? Does it matter if one uses EBITDA multiple or Perpetuity Grow

Approximate
COGS percent 21.795% 21.80%
SGA percent 57.97% 58%
Tax 35%
NWC percent / Change in Sales 0.0193787403818752 1.94%
WACC 12%

Forcasting
Year 2014 2015
Sales 11000000 13200000
COGS 2398000 2877600
SGA 6380000 7656000
R&D 11000 13200
D&A 24750 800000
EBIT 2186250 1853200
Tax 35%
EBIAT(PAT) 1421062.5 1204580
NCWC 68000 42680
FCFF 1344812.5 961900.000000001
` Terminal Value
FCFF Method 1 1344812.5 961900.000000001
FCFF Method 2 1344812.5 961900.000000001
NPV using Perpetuity Method ₹ 44,145,210.47
NPV using EBITDA multiple Method ₹ 60,311,338.13
EV "= MV of Equity + MV of Debt - Cash"
Debt 1017615
Cash and Deposits 811820

MV of Equity ₹ 43,939,415.47

% of Equity stake should they be giving up to the chinese investor 22.76%

ple or Perpetuity Growth Formula for computing the Terminal Value? How much of the equity stake should they be giving up

2016 2017 2018 2019

18480000 23100000 28875000 36093750 Capex
4028640 5035800 6294750 7868437.5 Depreciation %
10718400 13398000 16747500 20934375 D&A
18480 23100 28875 36093.75
47124 62370 82293.75 108281.25
3667356 4580730 5721581.25 7146562.5
Perpetuity Method
2383781.4 2977474.5 3719027.8125 4645265.625 Terminal value
102432 89628 112035 140043.75
2273033.4 2880916.5 3602661.5625 4505221.875 Ebidta Method
58567884.375
2273033.4 2880916.5 3602661.5625 63073106.25 Terminal value
2273033.4 2880916.5 3602661.5625 91563346.875
ke should they be giving up to the chinese investor?

33000 1000000 55440 69300 86625 108281.3

75% 80% 85% 90% 95% 100%
24750 800000 47124 62370 82293.75 108281.3

58567884.38

87058125
5.Do you think that they should take the chinese inves
No, They should not take the chinese investors offer.

It is much easier to raise 10 million from debt(bank loan).And if we accept the investors offer we would also have to
chinese investor's offer ? Why or Why not?

rs offer we would also have to give away 24% of equity stake and franchising rights in china.
6. Perform the sensitivity analysis under the perpetuity g
(a) If WACC= 12%
Scenario 1:
Approximate
COGS percent 21.795% 21.80%
SGA percent 57.97% 58%
Tax 35%
NWC percent / Change in Sales 0.0193787403818752 1.94%
WACC 12%
Capex % 0.30%

Forcasting
Year 2014 2015
Sales 11000000 13200000
COGS 2398000 2877600
SGA 6380000 7656000
R&D 11000 13200
D&A 24750 800000
EBIT 2186250 1853200
Tax 35%
EBIAT 1421062.5 1204580
NWC 68000 42680
FCFF 1344812.5 961900.000000001
Terminal Value
FCFF Method 1 1344812.5 961900.000000001
FCFF Method 2 1344812.5 961900.000000001
NPV using Perpetuity Method ₹ 44,145,210.47
NPV using EBITDA multiple Method ₹ 60,311,338.13
EV "= Equity + Debt - Cash"
Debt 1017615
Cash and Deposits 811820

Equity ₹ 43,939,415.47

Scenario 2:
Approximate
COGS percent 21.795% 21.80%
SGA percent 57.97% 58%
Tax 35%
NWC percent / Change in Sales 0.0193787403818752 1.94%
WACC 12%
Capex % 5%
Forcasting
Year 2014 2015
Sales 11000000 13200000
COGS 2398000 2877600
SGA 6376492.80414439 7524000
R&D 11000 13200
D&A 24750 800000
EBIT 2189757.19585561 1985200
Tax 35%
EBIAT 1423342.17730615 1290380
NWC 68000 42680
FCFF 1347092.17730615 1387700
Terminal Value
FCFF Method 1 1347092.17730615 1387700
FCFF Method 2 1347092.17730615 1387700
NPV using Perpetuity Method ₹ 55,389,507.95
NPV using EBITDA multiple Method ₹ 71,346,752.52
EV "= Equity + Debt - Cash"
Debt 1017615
Cash 811820

Equity ₹ 55,183,712.95

Scenario 3:
Approximate
COGS percent 21.795% 21.80%
SGA percent 57.97% 58%
Tax 35%
NWC percent / Change in Sales 0.0193787403818752 1.94%
WACC 20%
Capex % 5%

Forcasting
Year 2014 2015
Sales 11000000 13200000
COGS 2398000 2877600
SGA 6376492.80414439 7524000
R&D 11000 13200
D&A 24750 800000
EBIT 2189757.19585561 1985200
Tax 35%
EBIAT 1423342.17730615 1290380
NWC 68000 42680
FCFF 1347092.17730615 1387700
Terminal Value
FCFF Method 1 1347092.17730615 1387700
FCFF Method 2 1347092.17730615 1387700
NPV using Perpetuity Method ₹ 40,740,721.91
NPV using EBITDA multiple Method ₹ 51,680,305.19
EV "= Equity + Debt - Cash"
Debt 1017615
Cash 811820

Equity ₹ 40,534,926.91
he perpetuity growth and EBITDA Multiple

2016 2017 2018 2019

18480000 23100000 28875000 36093750
4028640 5035800 6294750 7868437.5
10718400 13398000 16747500 20934375
18480 23100 28875 36093.75
47124 62370 82293.75 108281.25
3667356 4580730 5721581.25 7146562.5

2383781.4 2977474.5 3719027.8125 4645265.625

102432 89628 112035 140043.75
2273033.4 2880916.5 3602661.5625 4505221.875
58567884.375
2273033.4 2880916.5 3602661.5625 63073106.25
2273033.4 2880916.5 3602661.5625 91563346.875
 2016 2017 2018 2019
18480000 23100000 28875000 36093750
4028640 5035800 6294750 7868437.5
10348800 12705000 15592500 19129688
18480 23100 28875 36093.75
47124 62370 82293.75 108281.25
4036956 5273730 6876581.25 8951250

2624021.4 3427924.5 4469777.8125 5818312.5

102432 89628 112035 140043.75
1644713.4 2245666.5 2996286.5625 3981862.5
58567884.375
1644713.4 2245666.5 2996286.5625 63073106.25
1644713.4 2245666.5 2996286.5625 112696237.5

2016 2017 2018 2019

18480000 23100000 28875000 36093750
4028640 5035800 6294750 7868437.5
10348800 12705000 15592500 19129688
18480 23100 28875 36093.75
47124 62370 82293.75 108281.25
4036956 5273730 6876581.25 8951250

2624021.4 3427924.5 4469777.8125 5818312.5

102432 89628 112035 140043.75
1644713.4 2245666.5 2996286.5625 3981862.5
58567884.375
1644713.4 2245666.5 2996286.5625 63073106.25
1644713.4 2245666.5 2996286.5625 112696237.5
 2014 2015 2016 2017 2018 2019
Capex 33000 1000000 55440 69300 86625 108281.3
Depreciation % 75% 80% 85% 90% 95% 100%
D&A 24750 800000 47124 62370 82293.75 108281.3

Perpetuity Method
Terminal value 58567884.38

Ebidta Method
Terminal value 87058125
Capex 33000 660000 924000 1155000 1443750 1804688
Depreication % 75% 80% 85% 90% 95% 100%
D&A 24750 528000 785400 1039500 1371563 1804688

Perpetuity Method
Terminal value 73817493.75

Ebidta Method
Terminal value 108714375

Capex 33000 660000 924000 1155000 1443750 1804688

Depreication % 75% 80% 85% 90% 95% 100%
D&A 24750 528000 785400 1039500 1371563 1804688

Perpetuity Method
Terminal value 73817493.75
Ebidta Method
Terminal value 108714375
7. Assuming Lady M China is worth 1/3 of the equity va
(a) Lady M retains 0% of LMC
(b) Lady M retains 25% of LMC
(c) Lady M retains 50% of LMC

Equity value of Lady M ₹ 43,939,415.47

Equity value of Lady M china 14646471.82305

a) Lady M retains 0% of LMC
Amount to be invested by
chinese investor 10 million
As the chinese investor is paying less than 14.6 million to claim 100% stake in LMC, he/she should not given any sta

(b) Lady M retains 25% of LMC

Amount to be invested by
chinese investor 10 million
Stake of 75% of LMC 10984853.86729

As the chinese investor is paying less than 10.9 million to claim 75% stake in LMC, he/she should not given any stak

(c) Lady M retains 50% of LMC

Amount to be invested by
chinese investor 10000000
Stake of 50% of LMC ₹ 7,323,235.91

% Stake to be given to
Chinese Investor in LM 6.09%
 of the equity value of Lady M, find out the value and % of stake giv

he/she should not given any stake in lady M

he/she should not given any stake in lady M

d % of stake given up to investor in Lady M under the following scenari
ollowing scenarios