Tottenham

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BASE CASE ASSUMPTIONS MADE • In order to discount the free cash flow to firm (FCFF), the following formula was used: o = ∗ 1 − + − − ∆ • In order to find WACC, the following assumptions were also made for the CAPM: o Market Risk Premium = FTSE CAGR 2002-2007 - fixed risk-free (given) = 4.68% o Debt costs = Interest payment / long-term debt = 5.25% • Equity ratio = market cap / total value = 128m/182m • Debt ratio = Market value debt / total = Exhibit 2 figures (not Balance Sheet) • Net debt for all different scenarios was assumed to be the value from t=0 • NWC = Current assets07 – current liabilities07 – excess cash07 (Working Capital Turnover Ratio: 58% of sales)1 was kept constant • Terminal Value = 2020 −…show more content…
20.09% 17.87% 16.29% 14.70% 13.78% 12.65% 11.89% 11.05% 10.48% 9.76% 4.01% -42.62 -46.46 -50.64 -55.19 -60.16 -65.57 -71.48 -77.91 -84.92 -92.57 -100.90 -109.98 -119.88 -124.67 -58% -58% -58% -58% -58% -58% -58% -58% -58% -58% -58% -58% -58% -58% 3.30 -3.84 3.43 -4.18 3.57 -4.56 3.71 -4.97 3.86 -5.41 4.01 -5.90 4.18 -6.44 4.34 -7.01 4.52 -7.64 4.70 -8.33 4.88 -9.08 5.08 -9.90 5.28 -4.80 5.49 4.45% 4.25% 4.05% 3.87% 3.69% 3.52% 3.36% 3.21% 3.06% 2.92% 2.78% 2.66% 2.53% 2.53% 2.20 2.29 2.38 2.47 2.57 2.68 2.78 2.90 3.01 3.13 3.26 3.39 3.52 3.66 2.97% 2.83% 2.70% 2.58% 2.46% 2.35% 2.24% 2.14% 2.04% 1.95% 1.86% 1.77% 1.69% 1.69% 2.26 0.19 0.35 0.72 2.46 0.38 0.71 5.01 2.69 0.59 1.10 5.84 2.93 0.82 1.52 6.74 3.19 1.05 1.96 7.71 3.48 1.30 2.42 8.76 3.79 1.57 2.91 9.88 4.13 1.85 3.43 11.11 4.50 2.13 3.96 12.40 4.91 2.43 4.52 13.79 5.35 2.74 5.09 15.26 5.83 3.05 5.66 16.85 6.36 3.37 6.25 18.52 6.61 3.50 6.50 307.90 1 0.92 4.62 0.85 4.96 0.78 5.28 0.72 5.57 0.67 5.83 0.61 6.07 0.57 6.29 0.52 6.47 0.48 6.63 0.44 6.77 0.41 6.89 0.38 6.98 0.38 116.07 % of

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