Pampa RV, Inc.: Valuation of Chico Clothing Company Marginal tax rate COGS as% of revenues 40% 38% SG&A as % of revenues 12% Perpetual growth rate for free cash flows 1.5% Free Cash Flow Estimate for CCC 2 3 4 Sales Revenue 575,000 300,000 335,000 375,000 410,000 Less: COGS Less: SG&A Less: Depreciation Equals: EBIT 15,000 30,000 40,000 52,000 60,000 Less: Taxes Equals: EBIAT Add: Depreciation OCF Less: Investments in Capex & NWC Equals: Free Cash Flow 40,000 18,000 25,000 50,000 65,000 Cost of Capital Estimate for CCC Marginal tax rate Terminal growth rate 40% 1.5% Expected return on market 7.5% Rf 2.5% E(Rm) E((Rm)-Rf) CCC equity beta CCC Cost of Capital 7,5% 1.353 Valuation of CCC 1 4 Yearly Free Cash Flows Terminal Value in year 5 TOTAL Cash Flows Value of CCC (S'000) Number of shares outstanding Price per share 100,000.00