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Assumptions: DCF Model

This document summarizes a discounted cash flow model for valuing a company. It lists key assumptions including a tax rate of 25%, discount rate of 12%, and perpetual growth rate of 3%. It then presents the company's projected financials like EBIT, cash taxes, depreciation and amortization, capital expenditures, and changes in net working capital for the years 2019 through 2023. It calculates the unlevered free cash flows for each period. Based on the discounted cash flows, it derives an intrinsic equity value per share of $1,811.86, which is higher than the current market price of $1,424.65 per share.

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niraj kumar
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76 views

Assumptions: DCF Model

This document summarizes a discounted cash flow model for valuing a company. It lists key assumptions including a tax rate of 25%, discount rate of 12%, and perpetual growth rate of 3%. It then presents the company's projected financials like EBIT, cash taxes, depreciation and amortization, capital expenditures, and changes in net working capital for the years 2019 through 2023. It calculates the unlevered free cash flows for each period. Based on the discounted cash flows, it derives an intrinsic equity value per share of $1,811.86, which is higher than the current market price of $1,424.65 per share.

Uploaded by

niraj kumar
Copyright
© © All Rights Reserved
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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DCF Model

Assumptions
Tax Rate 25%
Discount Rate 12%
Perpetural Growth Rate 3%
EV/EBITDA Mulltiple 17.4x
Transaction Date 3/31/2018
Fiscal Year End 3/31/2019
Current Price 1,424.65
Shares Outstanding 262,744,000
Debt 4,775,000,000
Cash 4,555,000,000
Capex 3,050,000,000

Discounted Cash Flow Entry 2019 2020


Date 3/31/2018 3/31/2019 3/31/2020
Time Periods 0 1
Year Fraction 1.00 1.00
EBIT 4,070,500,000 4,355,435,000
Less: Cash Taxes 1,064,000,000 1,088,858,750
Plus: D&A 171,600,000 175,032,000
Less: Capex 3,050,000,000 3,050,000,000
Less: Changes in NWC 59,720,000,000 62,108,800,000
Unlevered FCF (59,591,900,000) (61,717,191,750)
(Entry)/Exit (374,538,239,600)
Transaction CF (374,538,239,600) (59,591,900,000) (61,717,191,750)

Intrinsic Value
Enterprise Value (475,836,342,296)
Plus: Cash 4,555,000,000
Less: Debt 4,775,000,000
Equity Value (476,056,342,296)

Equity Value/Share 1,811.86


2021 2022 2023 Exit Terminal Value
3/31/2021 3/31/2022 3/31/2023 3/31/2023 Perpetural Growth
2 3 4 EV/EBITDA
1.00 1.00 1.00 Average
4,660,315,450 4,986,537,532 5,335,595,159
1,165,078,863 1,246,634,383 1,333,898,790
178,532,640 182,103,293 185,745,359
3,050,000,000 3,050,000,000 3,050,000,000
64,593,152,000 67,176,878,080 69,863,953,203
(63,969,382,773) (66,304,871,639) (68,726,511,476)
(345,232,708,720)
(63,969,382,773) (66,304,871,639) (68,726,511,476) (345,232,708,720)

Market Value Rate of Return


Market Cap 374,318,239,600 Target Price Upside
Plus: Debt 4,775,000,000 Internal Rate of Retu
Less: Cash 4,555,000,000
Enterprise Value 374,538,239,600 Market Value vs Intrinsic Valu
Market Value
Equity Value/Share 1,424.65 Upside
Intrinsic Value
(786,536,742,442)
96,071,325,002
(345,232,708,720)

27%
Err:502

Value vs Intrinsic Value


1,424.65
387.21
1,811.86

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