Share Valuation using FCFF and FCFE Constant growth assumption beyond year 5 FCFF 3,0% Tax 17% FCFE 1,5% No of shares 500 Cost of debt 5,0% Debt ratio 50,0% Beta 1,2 Market return 10,0% Risk free rate 2,0% Cost of equity 11,6% WACO Forecast of FCFF 1 2 3 4 6 Revenue 3000 3300 3597 $884,76 4156,6932 4406,0948 Operating income (EBIT) 660 647,46 621,5616 581,93705 528,73138 Taxes 112,2 110,0682 105,66547 98,929298 89,884334 NOPAT 547,8 537,3918 515,89613 483,00775 438,84704 - Incremental Fixed Capital (Capex - dep 100 99 95,92 90,6444 83,133864 - Increase in Working Capital 45 44,55 43,164 40,78998 37,410239 FCFF 102,8 393,8418 376,81213 351,57337 318,30294 327,85203 PVIF Terminal Value Value of FCFF during forecast period Value of Firm Value of Debt 1590 Value of Equity Value of stock Forecast of FCFE 1 2 3 4 5 Revenue 3000 3300 3597 $884,76 4156,6932 4406,0948 Net income 495 503,58 505,0188 498,80318 484,67043 - Incremental Fixed Capital (Capex - dep) 100 66 95,92 90,6444 83,133864 - Increase in Working Capital 45 44,55 43,164 40,78998 37,410239 - Net borrowings 72,5 71,775 69,542 65,71719 60,272051 FCFE 422,5 431,805 435,4768 433,08599 424,39838 430,76435 PVIF Value of FCFE during forecast period Terminal Value Value of Equity Value of share