Problem 18-14

Remex (RMX) currently has no debt in its capital structure. The beta of its equity is 1.50. For each year into the indefinite future, Remex’s free
cash flow is expected to equal $25 million. Remex is considering changing its capital structure by issuing debt and using the proceeds to buy
back stock. It will do so in such a way that it will have a 30% debt-equity ratio after the change, and it will maintain this debt-equity ratio forever. RMX CHANGE ITS FINANCIAL STRUCTURE BY STARTING USING
Assume that the required (i.e., expected) return on the debt Remex will be issuing is 6.5%. Remex faces a corporate tax rate of 35%. Except for the DEBT AND USE THAT DEBT TO REDUCE THE EQUITY CAPITAL
THROUGHT BUYBACK SHARES. IN THE END THE FINANCIAL
corporate tax rate of 35%, there are no market imperfections. Assume that the CAPM holds, the risk-free rate of interest is 5%, and the expected STRUCTURE WILL SEE A LEVERAGE OF 30%.
return on the market is 11%.

a. Using the information provided, fill in the table below:

Debt-Equity Debt Cost Equity Cost Weighted Average COSTO OF EQUITY = RF + BETA*ERP
Ratio of Capital of Capital Cost of Capital THE BETA USED IS :
- UNLEVERED IF THERE IS NO DEBT
Before Change in rf 5.00% D/D+E 23% - LEVERED IS THERE IS DEBT
Capital Structure 0 N/A 14.00% 14.00% rm 11.00% E/D+E 77%
ERP 6.00%
t 35.00%
After Change in rd 6.50%
SE CAMBIA LA STRUTTURA FINANZIARIA IL
Capital Structure 0.30 6.5% 16% 13.09% BETAun 1.5 COSTO DELL'EQUITY NON POTRA' ESSERE LO
STESSO PERCHE' AUMENTANDO IL DEBITO
BETAlev 1.79 AUMENTA IL RISCHIO DELL'EQUITY, QUINDI SI
RICALCOLA PARTENDO DA UN BETA CHE
b. Using the information provided and your calculations in part (a), determine the value of the tax shield acquired by Remex if it changes its STAVOLTA CONSIDERA IL DEBITO --> BETA
LEVERED
capital structure in the way it is considering.
BETA LEVERED = BETA UNELEVERED + BETA
UNLEVERED TIMES THE LEVERAGE D/E WHICH
IS DECREASED BY THE TAX RATE APPLIED ON IT
Corporate tax rate 0.35
Risk free rate
INSTEAS THE WACC WITH LEVERAGE IS
of interest 0.05 DECEASED THAN ONE WITHOUT IT.
Expected return THIS EXPLAINED BY THE TAX SHIELD
on the market 0.11
Expected annual
cash flow (millions) 25.00 THENPRESETN VALUE OF THE TAX SHIELD CAN BE COMPUTED AS THE DIFFERENCE
BETWEEN THE VAUE OF THE FIRM LEVERED AND THE VALUE LEVERED.
a. b. WE CAN STATE THE DIFFERENCE OF ONE FIRM IS INDEBTED OR NOT IS GIVEN ONLY BY
Debt-Equity Debt Cost Levered Equity Cost Weighted Average Firm Value Present Value of THE EFFECT OF THE TAX SHIELD HENCE THE LESS COSTLY DEBT ( COST OF DEBT) IS
COMPENSATED BY THE INCREASE IN COST OF EQUITY BUT THE SAVINGS RESULTED
Ratio of Capital Beta of Capital Cost of Capital (millions) Interest Tax Shield FROM APPLY THE
THE TAX OVER A LOWER INCOME, DUE TO INTEREST EXPENSE, INCREASE THE VALUE OF
Before Change in THE FIRM.
Capital Structure 0.00 1.50 14.00% 14.00% 178.57 THE WACC LEVERED IS USED ON FCFO OF THE COMPANY WHICH START FROM EBIT
AND WHICH IS UNLEVERED BEACUSE STILL DOES NOT ACCOUNT FOR SAVINGS FROM
TAX SHIELD BUT IT WILL DOES WHEN IS DISCOUNT,THE FCFO, BY A WACC WHICH IS
After Change in LEVERED
Capital Structure 0.30 0.065 1.79 15.75% 13.09% 190.92 12.35
INSTEAD WE USE THE WACC UNELEVERED WHEN WE WANT KNOW THE UNLEVERED
FIRM VALUE ( THE VALUE WITHOUT TAX SHIEDL) AND WE START ALSO IN THIS CASE
FROM THE FCFO BUT WHEN DISCOUNTED BY A WACC UNLEV AFTER WE SHOUL
D D COMPUTE ALSO THE TAX SHIEDL SEPARATELY
THEN THE TAX SHIEDL IS COMPUTED BY THE NPV OF EACH TAX SAVINGS EVERY YEARS
D
 E  E BetaL=BetaU*(1+D/E*(1-t)) DISCOUNTED BY THE WACC UNLEVERED LIKE IT IS A NET CASH-IN FOR SHAREHOLDERS.
NOTE: ED E  D D
1 IN THE END IF WE START FROM AFTER-TAX INTEREST EXP. WHICH ARE THE INTEEREST
E E EXP DECREASED BY THE TAX RATE APPLIED ON IT.
THEN WE CONDIERE THE NET BORROWING VARIATION.
THE FCFE IS THE FCFO LESS THE AFTER-TAX INTEREST EXPENSES AN LESS NET
BORROWING VARIATION
THE FCFE WLL BE DISCOUNTED BY THE COST OF EQUITY
Problem 18-15

You are evaluating a project that requires an investment of $90 today and provides a single cash flow of $115 for sure one year from now. You decide to use 100%
debt financing, that is, you will borrow $90. The risk-free rate is 5% and the tax rate is 40%. Assume that the investment is fully depreciated at the end of the year,
so without leverage you would owe taxes on the difference between the project cash flow and the investment, that is, $15.

Investment Today $ 90.00

Amount of Debt $ 90.00
Cash Flow in 1 Year $ 115.00
Tax Rate 40%
Risk-Free Rate 5.00%

a. Calculate the NPV of this investment opportunity using the APV method.
FCT at Year End
VU
PV(Interest Tax Shield)
VL
NPV
Risk-Free Rate

b. Using your answer to part (a), calculate the WACC of the project.

WACC

c. Verify that you get the same answer using the WACC method to calculate NPV.

VL
NPV

d. Finally, show that flow-to-equity also correctly gives the NPV of this investment opportunity.

FCFE
NPV
Problem 18-17

You are on your way to an important budget meeting. In the elevator, you review the project valuation
analysis you had your summer associate prepare for one of the projects to be discussed:

0 1 2 3 4
EBIT 10.0 10.0 10.0 10.0
Interest (5%) -4.0 -4.0 -3.0 -2.0
Earnings Before Taxes 6.0 6.0 7.0 8.0
Taxes -2.4 -2.4 -2.8 -3.2
Depreciation 25.0 25.0 25.0 25.0
Cap Ex -100.0
Additions to NWC -20.0 20.0
Net New Debt 80.0 0.0 -20.0 -20.0 -40.0
FCFE -40.0 28.6 8.6 9.2 9.8
Discounted CF -40.0 25.8 7.0 6.7 6.5
NPV at 11% Equity Cost of Ca 5.9 5.9 check

Looking over the spreadsheet, you realize that while all of the cash flow estimates are correct, your
associate used the flow-to-equity valuation method and discounted the cash flows using the company’s
equity cost of capital of 11%. However, the project’s incremental leverage is very different from
the company’s historical debt-equity ratio of 0.20: For this project, the company will instead
borrow $80 million upfront and repay $20 million in year 2, $20 million in year 3, and $40 million
in year 4. Thus the project’s equity cost of capital is likely to be higher than the firm’s, not
constant over time—invalidating your associate’s calculation.

Clearly, the FTE approach is not the best way to analyze this project. Fortunately, you have your
calculator with you, and with any luck you can use a better method before the meeting starts.
a. What is the present value of the interest tax shield associated with this project?
b. What are the free cash flows of the project?
c. What is the best estimate of the project’s value from the information given?

Year 0 1 2 3 4
Debt 80.00 80.00 60.00 40.00 0.00
EBIT 10.00 10.00 10.00 10.00
Interest 0.050 (4.00) (4.00) (3.00) (2.00)
Earnings before taxes 6.00 6.00 7.00 8.00
Taxes 0.400 (2.40) (2.40) (2.80) (3.20)
Depreciation 25.00 25.00 25.00 25.00
Cap Ex (100.00)
Additions to NWC (20.00) 20.00
Net New Debt w/annual payment 80.00 0.00 (20.00) (20.00) (40.00)
Free Cash Flow to Equity (FCFE) (40.00) 28.60 8.60 9.20 9.80
NPV at equity cost
of capital 11.00% 5.93
a. Interest tax shield 1.60 1.60 1.20 0.80
PV of interest tax shield 4.67

b. Free cash flows:

EBIT 0.00 10.00 10.00 10.00 10.00
EBIT(1-t) 0.00 6.00 6.00 6.00 6.00
Plus Depreciation 0.00 25.00 25.00 25.00 25.00
Cap Ex (100.00) 0.00 0.00 0.00 0.00
var Additions to NWC (20.00) 0.00 0.00 0.00 20.00
Free cash flows: (120.00) 31.00 31.00 31.00 51.00

c. Historical debt/equity ratio 0.200 D/E 0.2

Unlevered cost of capital 10.00% D/D+E 0.1666667
Value of free cash flows (8.07) E/D+E 0.8333333
PV of interest tax shield 4.67
Total project value (3.40)
TAX SHIEL EACH YEAR=
NET INTEREST EXPENSES * TAX RATE

NPV TAX SHIELD =

SUM OF EACH DISCOUNTED AT COST
OF DEBT TAX SHIELD
COMPUTE THE COST OF CAPITAL UNLEVERED TO KNOW
THE ASSET RETURN WITHOUT CONSIDERING THE
BENEFITS OF LEVERAGE AND SO WITHOUT CONSIDERING
A CERTAIN FINANCIAL STRUCTURE.

SO WE USE THE HISTORICAL FINANCIAL STRUCTURE THE

INTEREST RATE =COST OF DEBT AND THE COST OF EQUITY

IF WE KNOW THAT D/E=0,2 WE KNOW THAT DEBT IS 20%

OF EQUITY, SO THE TOTAL VALUE OF ASSET IS 1 OF EQUITY
+ 20% OF EQUITY (DEBT) , SO 1,2.
ONCE WE KNOW THE SUM OF DEBT AND EQUITY WE CAN
DIVIDE THE DEBT BY THE ASSET VALUE 20%/1,20
FINDING THE WEIGHT OF DEBT
Problem 18-26

Revtek, Inc., has an equity cost of capital of 12% and a debt cost of capital of 6%. Revtek
maintains a constant debt-equity ratio of 0.5, and its tax rate is 35%.

Cost of equity 12.00% D/D+E 0.333333 D/E 0.5 SE SO CHE IL DEBITO E' META DELL'EQUITY IL TOTALE SARA 1 DELL EQUITY PIU 0,5 DEL DEBITO
Cost of debt 6.00% E/D+E 0.666667 D/E+1 1.5 IL DEBITO A SUA VOLTA SARA' 0,5 SUL TOTALE DI 1,5 QUINDI 0,33333
Debt-equity ratio 0.50 D+E/E 1.5
Tax rate 35.00% E/E+D 1/1,5

a. What is Revtek’s WACC given its current debt-equity ratio?

WACC 9.30%

b. Assuming no personal taxes, how will Revtek’s WACC change if it increases its debt-
equity ratio to 2 and its debt cost of capital remains at 6%? THE UNLEVERED COST OF CAPITAL IS COMPUTED AS THE PRIO WACC WITHOUT TAX SAVINGS

Debt to equity ratio 2.00 D/D+E 0.666667 D/E 2

Unlevered return 10.00% E/D+E 0.333333 D/E+1 3 IL NUOVO WACC SI OTTIENE COME
WACC 8.6000% D+E/E 3 UNLEVERED RETURN- COST OF DEBT*TAX RATE*D/V
E/D+E 1/3 SI RIDUCE IL WACC DEL RISPARMIO DI ALIQUOTA
c.
Now suppose investors pay tax rates of 40% on interest income and 15% on income E' DIVERSO CALCORARE IL WACC PARTENDO DA UNA DETERMINATA
from equity. How will Revtek’s WACC change if it increases its debt-equity ratio to 2 STRUTTURA E CALCOLARE IL WACC DA UNA STRUTTURA
FINANZIARIA PRECEDENTE OTTENDO IL VALORE PER LA NUOVA.
in this case? SI CALCOLA IL VALORE UNLEVERED (SENZA SCUDO FISCALE) DEL
COSTO DEL CAPITALE CON LA STRUTTUT FINANZIARIA PRECEDENTE
Personal tax rate PER POI SCONTARLO PER LO SCUDO FISCALE
on dividend income 15.00%
Personal tax rate
on interest income 40.00%
CASO C) L'INVESTITORE PAGA DELLE TASS EPERSONALI SUGLI INTERESSI E SUI
After tax cost of debt 4.24% DIVIDENDI.

IL COSTO DEL DEBITO LEVERAGE(AFTER TAX, SO CONSIDERING THE TAX SHIELD) SI

WACC before CALCOLA COME COSTO DEL DEBITO - L'ALIQUOTA.
change in D/E 9.41% IN QUESTO CASO SI DEVE COSIDERARE CHE IL MAGGIOR REDDITO DOPO LA
re with higher leverage 19.76% TASSAZIONE VIENE TASSATO DA UNA TASSA SUI DIVIDENDI(POSSIBILMENTE
DISTRIBUITI),
WACC after DIVIDENDO LO SCUDO FISCALE PER LA MAGGIORE TASSAZIONE SUI DIVIDENDI SI
OTTIENE UN COSTO DEL DEBITO INFERIORE A QUELLO IN ASSENZA DI TASSE MA
change in D/E 9.19% SUPERIORE A QUELLO IN ASSENZA DI TASSAZIONE SUI DIVIDENDI.
COSTO DEL DEBITO--DIMINUISCE ALLA AUMENTARE DEL INTEREST TAX
-- AUMENTA ALL'AUMENTARE DELL'INCOME TAX
d.
IL WACC CON UN COSTO DEL DEBITO AFTER TAX SUPERIORE SARA' ANCH'ESSO
Provide an intuitive explanation for the difference in your answers to parts (b) and (c). MAGGIORE

IL COSTO DELL EQUITY CON UN LIVELLO DEL DEBITO MAGGIORE AUMENTA E SI

CALCOLA CON IL VALORE DEL WACC PRIMA CHE TALE DEBITO AUMENTI E SI TOGLIE
IL COSTO DEL DEBITO PER LA NUOVA % DI DEBITO SUL TOTALE DAL WACC
ADESSO SI CONSIDERA ANCHE IL NUOVO PESO DELL EQUITY NELLA NUOVA
STRUTTURA E SI DIVIDE AL WACC SOTTRATTO DAL COSTO DEL DEBITO PER LA NUOVA
STRUTTURA E SI DIVIDE PER IL NUOVO PESO DELL'EQUITY (OVE PER CALCORARE IL
WACC AL CONTRARIO SI MOLTIPLICA)

PER CALCORE IL NUOVO WACC CONSIDERIAMO IL NUOVO COST OF EQUITY PER LA

NUOVA % DI EQUITY
IL COSTO DEL DEBITO CONSIDERANDO SOLO LA TASSAZIONE SUL REDDITO DI
IMPRESA MOLTIPLICATO PER LA NUOVA % DI DEBITO
IL COSTO DEL DEBITO E' QUELLO INIZIALE POICHE' SI ASSUME NON VARI
+
Solutions to Chapter 18 Data Case All numbers except per share data in millions

Toyota Motor Company is expanding the production of their gas-electric hybrid drive systems and plans to being production in United State
To enable the expansion they are contemplating investing $1.5 billion in a new plant with an expected 10-year life.
The anticipated free cash flows from the new plant would be $220 million the first year of operation and
and then 5% per year for the remaining seven years.
As a newly hired MBA in the capital budgeting division you have been asked to evaluate the new project using the WACC,
Adjusted Present Value, and Flow-to-Equity methods. You will compute the appropriate costs of capital and the net present valuew with ea

1a Income statement Symbol: TM

1b Balance sheet

1c St. Price Apr-21 Apr-20 Apr-19

2 Create a Timeline in excel with the free cash flows for the 10 years of the project

Growth 10% 5%
Year 0 1 2 3 4
PROJECT FCF -1,500 220 242 266 280

3 Determine the WACC

Average Rating AA https://global.toyota/en/ir/st (if toyata has high ratings, than the cost of debt can be ap

Assumed Beta Debt 0 FOR HIGH RATING FIRMS WE ASSUME THAT ARE RISK-FREE SO THE BETA OF ITS DEBT
CURRENT DAT 3/4/2023
10-year Bond 3.43% (risk free rate)https://home.treasury.gov/resource-cent

Beta 0.56 WE FIND THE BETA OF EQUITY (Levered) ON

IS THE MARKET
Market risk premium 5.94% RETURN OVER THE WE FIND IT ON DAMODARAN WEB SITE :
RISK FREE OF THE
COUNTRY A) FOR USA MARKET IF WE WANT KNOW ERP OF DIFFERE
Cost of Equity 6.76% B) IF WANT KNOW ERP FOR DIFFERENT COUNTRY THAN U
YTM--Cost of Debt 3.43% FOR HIGH RATING FIRMS WE ASSUME THAT ARE RISK-FREE SO THE BETA OF ITS DEBT

Apr-21 Apr-20 Apr-19

Net Debt 139,470,000 133,123,000 131,512,000

Equity 128,994,000 128,201,000 124,667,000

IN ORDER TO COMPUTE THE DEBT AND EQUITY WE
WE COMPUTE SOME AVERAGE VALUE OF THE FINA
Enterprise Value 268,464,000 261,324,000 256,179,000 DURING LAST YEARS

Debt to Value (D/D+E) 52% 51% 51%

Target Debt Weight (D/D+ 51.41% Target Equity 48.59% THE TARGET DEBT FOR THE PROJECT IS AS

Tax Rate 51.81% THE TAX RATE IS THE TAX EXPENSES OVER
WE TAKE THE AVERAGE OF THE LAST 3Y TA

Levered WACC 4.13%

THE WACC IS LEVERED BECAUSE CONSIDER
WHEN THE WACC DOS NOT CONSIDER THE

4 Compute the NPV using the WACC method of valuation

Levered WACC 4.13%
NPV-WACC $2,376 LEVERED VALUE (THERE IS ALSO THE TAX SHIELD)

5 Compute the NPV using the Adjusted Present Value Method

 Unlevered WACC 5.05% THE UNLEVERED VALUE OF THE PROJECT IS THE
DISCUNTED CASH FLOW IN CASE OF NO TAX SHIELD.
Unlevered Value $2,263 FCFO DISCOUNTED AT UNLEVERED WACC
TO COMPUTE THE DEBT CAPACITY EACH YEAR -->
0 1 2 3 4
Levered Value 2376.32 2254.52 2105.70 1926.52

Debt Capacity 1,222 1,159 1,083 990

Interest Pmts 0 42 40 37 34
Interest Tax Shield 0 22 21 19 18

PV Tax Shield $113.21 WE USE THE UNLEVERED WACC TO DISCOUNT THE TAX SHIELD

Levered Value $2,376.32 LEVERED VALUE BY APV IS THE UNLEVERED

VALUE OF THE PROJECT CASH FLOW, FCFO AT
NPV--APV UNLEVERED WACC PLUS , PLUS THE NPV OF TAX
SHIELD , EACH TAX SHIELD DISCOUNTED AT
UNLEVERED WACC

6 Compute the NPV using the FCFE method

0 1 2 3 4
FCF (1,500) 220 242 266 280
Interest Pmts 42 40 37 34
Interest Tax Shield 22 20.59637148 19.23675903 17.5998762

After-tax Interest Pmts 20.19 19.16 17.89 16.37

After-tax Interest Pmts 20.19 19.16 17.89 16.37

Net Borrowing 1,222 (63) (77) (92) (103)

FCFE -278 137 146 156 160

NPV 2,376.32

NET BORROWING REPRESENT

levered value = DURING THE PROJECT LIFE.
FCFE discounted by cost of -) CASH-OUT WHERE DEBT D
capital + starting net debt of +) CASH-IN WHERE DEBT INC
the project (or the of the firm)
ATTENTION: THE VARIATION
CASH FLOW, NOT IN TIME-t+1
nd plans to being production in United States.
n expected 10-year life.
f operation and grow by 10% for each of the next two years

w project using the WACC,

f capital and the net present valuew with each method.

5 6 7 8 9 10
293 308 324 340 357 375

high ratings, than the cost of debt can be approximate with the risk-free rate)

ARE RISK-FREE SO THE BETA OF ITS DEBT IS ASSUMED EQUAL TO 0

https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value

BETA OF EQUITY (Levered) ON https://it.finance.yahoo.com/quote/TM?p=TM&.tsrc=fin-srch

N DAMODARAN WEB SITE :
ARKET IF WE WANT KNOW ERP OF DIFFERENT YEARS WE LOOK AT https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histim
NOW ERP FOR DIFFERENT COUNTRY THAN USA : https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/ctrypr
ARE RISK-FREE SO THE BETA OF ITS DEBT IS ASSUMED EQUAL TO 0

(Short term debt + Long term debt - cash)

IN ORDER TO COMPUTE THE DEBT AND EQUITY WEIHGT FOR THE PROJECT
WE COMPUTE SOME AVERAGE VALUE OF THE FINANCIAL STRUCTURE
DURING LAST YEARS

THE TARGET DEBT FOR THE PROJECT IS ASSUMED EQUAL TO THE LAST 3Y AVERAGE

THE TAX RATE IS THE TAX EXPENSES OVER THE EBT ( WHICH IS THE OPERATIVE INCOME LESS THE FINANCIAL EXPESES)
WE TAKE THE AVERAGE OF THE LAST 3Y TAX RATE

THE WACC IS LEVERED BECAUSE CONSIDER THE TAX SHIELD

WHEN THE WACC DOS NOT CONSIDER THE TAX SHIELD IS UNLEVERED ALSO IF THE FIRM USE DEBT BUT THIS DEBT INFLUENCE ONLY THE COST OF

O THE TAX SHIELD) LEVERED VALUE IS THE VALUE OF THE

PROJECT IN CASE OF TAX SHIELD.
FCFO AT LEVERED WACC
 LEVERED VALUE IS THE VALUE OF THE
PROJECT IN CASE OF TAX SHIELD.
FCFO AT LEVERED WACC

RED VALUE OF THE PROJECT IS THE

TO COMPUTE THE DEBT CAPACITY EACH YEAR FOR THE PROJECT WE CONSIDER THE
ASH FLOW IN CASE OF NO TAX SHIELD. TARGET DEBT WEIGHT TIMES THE LEVERED PROJECT VALUE EACH YEAR
NTED AT UNLEVERED WACC THE LEVERED VAUE OF THE PROJECT EACH YEAR IS THE DISCOUNTED VALUE OF
NEXT YEARS CASH FLOW

5 6 7 8 9 10
1726.63 1504.50 1258.52 986.96 688.00 359.70 LEVERED VALUE = FCF DISCOUNTED BY

888 773 647 507 354 185 DEBT CAPACITY = D/V TARGET * LEVE

30 27 22 17 12 6
16 14 11 9 6 3

UNT THE TAX SHIELD

INSTEAD ASSUMED A COSTANT DEBT DURING THE PROJECT LIFE, WHEN DEBT
E BY APV IS THE UNLEVERED CHANGE OVER THE YEARS, DUE TO DEBT REPAYMENT OR INCREASE IN
PROJECT CASH FLOW, FCFO AT BORROW, TO BE MORE ACCURATE IN THE COMPUTATION WE COMPUTE
ACC PLUS , PLUS THE NPV OF TAX INTEREST EXPENSES OVER YEARS, THEN THE TAX SHIELD AT EACH YEARS
TAX SHIELD DISCOUNTED AT AND DISCOUNT EACH ONE AT THE PRESENT TIME BY THE UNLEVERED WACC
ACC (WE ALREADY SAID THAT IS A NET CASH FOR EQUITY-HOLDERS AND THE TAX
SAVINGS BY INTEREST IS ALREDY ACCOUNTED IN THE COMPUTATION )

5 6 7 8 9 10
293 308 324 340 357 375
30 27 22 17 12 6
15.77375050249 13.7444813 11.49728942 9.01646578 6.285316926 3.28610757 AFTER-TAX INTEREST PAYMENT = DEBT
AFTER-TAX INTEREST PAYMENT = Deb
14.67 12.79 10.69 8.39 5.85 3.06
14.67 12.79 10.69 8.39 5.85 3.06

(114) (126) (140) (154) (169) (185)

165 169 173 178 182 187

NET BORROWING REPRESENT THE CHANGE IN DEBT FCF - INTEREST*(1-T) +NET BORROWING
DURING THE PROJECT LIFE.
-) CASH-OUT WHERE DEBT DECREASE NET BORROWING = ∆ DEBT CAPACITY
+) CASH-IN WHERE DEBT INCREASE

ATTENTION: THE VARIATION RESULT IN IN TIME-t

CASH FLOW, NOT IN TIME-t+1
urve&field_tdr_date_value_month=202304

ome_Page/datafile/histimpl.html
ome_Page/datafile/ctryprem.html

UENCE ONLY THE COST OF EQUITY NOT THE ASSET RETURN (UNLEVERED COST OF CAPITAL/WACC UN)
ALUE = FCF DISCOUNTED BY THE LEVERED WACC

CITY = D/V TARGET * LEVERED VALUE

CT LIFE, WHEN DEBT

INCREASE IN
WE COMPUTE
AT EACH YEARS
UNLEVERED WACC
DERS AND THE TAX
MPUTATION )

INTEREST PAYMENT = DEBT CAPACITY*RD*(1-T)

INTEREST PAYMENT = Debt capacity * rD - Debt capacity * rD * t
 Interest
Coverage Rating Spread
ratio
More than 12AAA 0.75%
9,5-12,5 AA 1.00%
7,5-9,5 A+ 1.50%
6,0-7,5 A 1.80%
4,5-6,0 A- 2.00%
3,5-4,5 BBB 2.25%
3,0-3,5 BB 3.50%
2,5-3,0 B+ 4.75%
2,0-2,5 B 6.50%
1,5-2,0 B- 8.00%
1,25-1,5 CCC 10.00%
0,8-1,25 CC 11.50%
0,5-0,8 C 12.70%
Less than 0,5D 14.00%
Source: Compustat

Cost of debt
as of 31/12/2021
EBIT -
Net Interest Expenses -
ICR #DIV/0!
Standard & Poor's (S&P) A+ 1
Moody's A1 1
Rating and Investment Information, Inc. (R&I) AAA 5
Japan Credit Rating Agency, Ltd. (JCR) AAA 5
AVERAGE 2 2.4

SAREBBE AA- ,A IL PROF HA ARROTONDATO AD "AA"

A1 A+ 1
AA- 2
AA 3
AA+ 4
AAA 5
NDATO AD "AA"
Income Statement
View: Annual Data | Quarterly Data
Period Ending
Total Revenue
Cost of Revenue

Gross Profit

Operating Income or Loss

Net Income
Preferred Stock And Other Adjustments

Net Income Applicable To Common Shares

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95941440
 Mar 31, 2021 Mar 31, 2020 Mar 31, 2019
234,289,000 225,818,000 229,171,000
197,940,000 199,144,000 200,474,000

36,349,000 26,673,000 28,696,000

Operating Expenses
Research Development - - -
Selling General and Administrative 22,323,000 22,352,000 23,046,000
Non Recurring - - -
Others - - -

Total Operating Expenses - - -

14,026,000 4,321,000 5,650,000

Income from Continuing Operations

Total Other Income/Expenses Net 1,123,000 1,218,000 1,500,000
Earnings Before Interest And Taxes 15,149,000 5,539,000 7,150,000
Interest Expense 244,000 279,000 354,000
Income Before Tax 14,905,000 5,260,000 6,796,000
Income Tax Expense 5,858,000 3,187,000 3,774,000
Minority Interest -1,288,000 -1,030,000 -691,000

Net Income From Continuing Ops 10,217,000 3,446,000 4,925,000

Non-recurring Events
Discontinued Operations - - -
Extraordinary Items - - -
Effect Of Accounting Changes - - -
Other Items - - -

10,217,000 3,446,000 4,925,000

- - -

10,217,000 3,446,000 4,925,000

blic companies.

r exchanges. All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! no
 Get Income Statement for:
All numbers in thousands

0.393022475679302 0.6058935 0.5553267

trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delay
ors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agre
he Yahoo! site, you agree not to redistribute the information found therein. Real-Time continuous streaming quotes are available through ou
are available through our premium service. You may turn streaming quotes on or off.
Balance Sheet
View: Annual Data | Quarterly Data
Period Ending

Assets
Current Assets
Cash And Cash Equivalents
Short Term Investments
Net Receivables
Inventory
Other Current Assets
Total Current Assets

Long Term Investments

Property Plant and Equipment
Goodwill
Intangible Assets
Accumulated Amortization
Other Assets
Deferred Long Term Asset Charges

Total Assets

Liabilities
Current Liabilities
Accounts Payable
Short/Current Long Term Debt
Other Current Liabilities

Total Current Liabilities

Long Term Debt
Other Liabilities
Deferred Long Term Liability Charges
Minority Interest
Negative Goodwill

Total Liabilities

Stockholders' Equity
Misc Stocks Options Warrants
Redeemable Preferred Stock
Preferred Stock
Common Stock
Retained Earnings
Treasury Stock
Capital Surplus
Other Stockholder Equity

Total Stockholder Equity

Net Tangible Assets

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Currency in USD.

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Quotes are real-time for NASDAQ, NYSE, and NYSE MKT. See also delay times for other exchanges. All information provided

US Financials data provided by Edgar Online and all other Financials provided by Capital IQ.

95941443
 Get Balance Sheet for:
All numbers in thousands
Mar 31, 2021 Mar 31, 2020 Mar 31, 2019

18,246,000 20,405,000 25,105,000

16,484,000 15,327,000 17,246,000
87,831,000 88,000,000 78,403,000
18,219,000 19,713,000 15,737,000
5,596,000 6,275,000 6,243,000
146,375,000 149,720,000 142,734,000

151,605,000 141,364,000 132,933,000

72,750,000 75,769,000 76,124,000
- - -
- - -
- - -
6,051,000 5,600,000 7,985,000
- - -

376,781,000 372,452,000 359,775,000

47,311,000 51,096,000 40,892,000

79,799,000 80,106,000 78,803,000
10,002,000 11,961,000 10,506,000

137,112,000 143,163,000 130,200,000

77,917,000 73,422,000 77,814,000
11,406,000 10,350,000 10,229,000
14,717,000 11,044,000 9,775,000
6,635,000 6,273,000 7,090,000
- - -

241,152,000 237,979,000 228,018,000

- - -
- - -
- - -
4,216,000 4,825,000 4,791,000
134,741,000 144,809,000 142,805,000
-12,032,000 -13,800,000 -15,219,000
5,851,000 6,691,000 6,102,000
-3,782,000 -14,324,000 -13,812,000

128,994,000 128,201,000 124,667,000

128,994,000 128,201,000 124,667,000

blic companies.
r exchanges. All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! no
dvice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions ta
ays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the info
not to redistribute the information found therein. Real-Time continuous streaming quotes are available through our premium service. You ma
premium service. You may turn streaming quotes on or off.
Cash Flow
View: Annual Data | Quarterly Data
Period Ending
Net Income

Operating Activities, Cash Flows Provided By or Used In

Depreciation
Adjustments To Net Income
Changes In Accounts Receivables
Changes In Liabilities
Changes In Inventories
Changes In Other Operating Activities

Total Cash Flow From Operating Activities

Investing Activities, Cash Flows Provided By or Used In

Capital Expenditures
Investments
Other Cash flows from Investing Activities

Total Cash Flows From Investing Activities

Financing Activities, Cash Flows Provided By or Used In

Dividends Paid
Sale Purchase of Stock
Net Borrowings
Other Cash Flows from Financing Activities

Total Cash Flows From Financing Activities

Effect Of Exchange Rate Changes

Change In Cash and Cash Equivalents

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Currency in USD.

Privacy - About Our Ads - Terms - Send Feedback - Yahoo! - ABC News Network
Quotes are real-time for NASDAQ, NYSE, and NYSE MKT. See also delay times for other exchanges. All information provided

US Financials data provided by Edgar Online and all other Financials provided by Capital IQ.

95941457
 Get Cash Flow for:
All numbers in thousands
Mar 31, 2021 Mar 31, 2020 Mar 31, 2019
10,217,000 3,446,000 4,925,000

11,735,000 12,976,000 14,184,000

-322,000 -943,000 -1,260,000
-1,787,000 -7,114,000 5,085,000
987,000 13,289,000 -2,504,000
536,000 -4,191,000 625,000
3,375,000 -843,000 2,675,000

26,029,000 17,649,000 24,421,000

-9,074,000 -8,792,000 -7,593,000

-23,488,000 -9,184,000 -18,561,000
416,000 445,000 619,000

-32,146,000 -17,530,000 -25,535,000

-2,018,000 -1,905,000 -1,703,000

-458,000 -455,000 -345,000
7,543,000 -1,958,000 7,288,000
- - -

5,068,000 -4,318,000 5,240,000

1,464,000 -680,000 -1,533,000

415,000 -4,879,000 2,594,000

blic companies.

r exchanges. All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! no
r advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions
delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the
e not to redistribute the information found therein. Real-Time continuous streaming quotes are available through our premium service. You
r premium service. You may turn streaming quotes on or off.