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 2 3 4 5 2020A CAGR 2019-2024 10.0% EBIT Lesa: Provision for Taxes Plus: Depreciation and Amortization Operating Cash Flow Loss: Capital Expenditures Lose: Change in Net Working Capital Free Cash Flow PV FCF 100.0 (30.0) 10.00 $80.0 150 Calendar Year Ending December 31 2021E 2022E 2023E 2024E 110.0 121.0 133.1 146.4 (33.0) (36.3) (39.9) (43.9) 10.00 10.00 10.00 10.00 $87.0 $94.7 $103.2 $112.5 15 0 15.0 15.0 2025E 161.1 (483) 10.00 $122.7 8.9% 15.0 15.0 REF Terminal Value PV Terminal Value PV Projected Cash Flows Total PV - Firm Value