Assumptions: Tax Rate Discount Rate Perpetual Growth Debt Shares Outst 30.0% 10.0% 3.0% 70 50 Calculate the Firm Value using DCF. EBIT is expected to grow by 10% per year DEPR and CAPEX will remain the same each year Change to NWC will grow by 10% per year FCF expected to grow by 3% in perpetuity after year 5. Discount CFs by 10% rate Free Cash Flow Calculation 1 3 5 2020A Calendar Year Ending December 31, 2021E 2022E 2023E 2024E 110.0 121.0 133.1 146.4 2025E 161.1 CAGR 2019-2024 10.0% 100.0 10.00 10.00 10.00 10.00 10.00 10.00 NDIVOI ARER EBIT Less: Provision for Taxos Plus: Depreciation and Amortization Operating Cash Flow Loss: Capital Expenditures 2 Loss: Change in Not Working Capital Free Cash Flow 4 PV FCF 5 6 7 Terminal Value 28 PV Terminal Value PV Projected Cash Flows 30 Total PV - Firm Value 31 32 33