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P&G (in millions) Revenue (Year 0) slaes 56,741 D/(D+E) 10.00% EBIT (Year 0) 10,927 E/(D+E) 90.00% Tax rate 35.00% Equity beta 0.80 Total invested capital
| P&G | ||||||
| (in millions) | ||||||
| Revenue (Year 0) slaes | 56,741 | D/(D+E) | 10.00% | |||
| EBIT (Year 0) | 10,927 | E/(D+E) | 90.00% | |||
| Tax rate | 35.00% | Equity beta | 0.80 | |||
| Total invested capital | 38,119 | Pretax cost of debt | 5.00% | |||
| Pretax return on capital | 10,927 | Risk free rate | 4.25% | |||
| After tax return on capital | 7,102.55 | Risk premium | 4.00% | |||
| Reinvestment rate (forecast period) | 40.00% | Cost of equity | 7.45% | |||
| Reinvestment rate (stable) | 60.46% | After tax cost of capital | 8.09% | |||
| Implied growth rate | ? | |||||
| Stable growth rate | 4.25% | |||||
| Year | 1 | 2 | 3 | 4 | 5 | Terminal year |
| NOPAT | ||||||
| Reinvestment rate | ||||||
| Reinvestment (capex) | ||||||
| FCFF | ||||||
| PV of forecast period | ||||||
| PV of terminal value | ||||||
| Total PV | ||||||
| Standalone valuation of P&G | ||||||
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Auditing Cases An Active Learning Approach
Authors: Mark S. Beasley, Frank A. Buckless, Steven M. Glover, Douglas F. Prawitt
2nd Edition
0130674842, 978-0130674845
