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Free Cash Flow to Firm (FCFF) Valuation         
             
             
Enter the information highlighted in yellow.          
             
This is a Three-stage FCFF Valuation Model, also presented in terms of projected EVA.    
             
           
             
Current Inputs            
Enter the current revenues of the firm =         
Enter current capital invested in the firm ={ As a naïve estimate, you can use BV of debt + BV of Equity)   
Enter the current depreciation =         
Enter the current capital expenditures for the firm =         
Enter the change in Working Capital in last year =         
Enter the value of current debt outstanding =         
Enter the number of shares outstanding =         
             
High Growth Period            
Enter the growth rate in revenues for the next 5 years =        
What will COGS be as a % of revenues in the fifth year?(COGS includes depreciation: This is equal to (1-Pre-tax Operating Margin))
How much debt do you plan to use in financing investments?        
Enter the growth rate in capital expenditures & depreciation        
Enter working capital as a percent of revenues        
Enter the tax rate that you have on corporate income        
What beta do you want to use to calculate cost of equity =        
Enter the current long term bond rate =         
Enter the market risk premium you want to use =        
Enter your cost of borrowing money =         
             
Stable Period            
Enter the growth rate in revenues =        
Enter COGS as a % of revenues in stable period =        
Enter capital expenditures as a percent of depreciation in this period        
How much debt do you plan to use in financing investments?        
Enter interest rate of debt in stable period =        
What beta do you want to use in the stable period =        
             
ESTIMATED CASHFLOWS 
 Base12345678910 
Growth in Revenue  
Growth in Deprec'n  
Revenues 
COGS            
% of Revenues 
- $ COGS 
EBIT 
Tax Rate 
             
EBIT (1-t) 
+ Depreciation 
- Capital Expenditures 
- Change in WC 
= FCFF 
Terminal Value           
             
COSTS OF EQUITY AND CAPITAL 
   
Cost of Equity  
Proportion of Equity  
After-tax Cost of Debt  
Proportion of Debt  
Cost of Capital  
Cumulative WACC  
             
Present Value  
             
FIRM VALUATION:            
Value of Firm           
- Value of Debt           
Value of Equity           
Value of Equity per Share           
             
   
Value of Firm by year  
$ Value of Debt  
             
EVA Valuation            
 Terminal Year
- WACC (CI) 
EVA 
Terminal EVA           
PV  
PV of EVA           
+ Capital Invested           
+ PV of Chg Capital in Yr 10This reconciles the assumptions on stable growth, ROC and Capital Invested   
= Firm Value           
             
WACC