File Home Insert Page Layout Formulas Data Review View Developer Inqu F16 9 Prep

Question

File Home Insert Page Layout Formulas Data Review View Developer Inqu F16 9 Prepare a DCF Analysis given the following assumptions: 10 11 Operating Assumptions (for years 1-5) 12 13 Revenue Growth 14 Cost of Revenue as % of Revenue 6.0% 57.0% 19.0% 4.0% 34.0% 1.0% 3.0% 16 Depreciation Expense as % of Revenue 17 Tax Rate 19 Capex as % of Revenue 20 21 Risk Free Historical Total Market Return- 23 Beta 24 25 Interest and Principal Payments assumed that are paid at thet last day of the year Zero Years years EBITDA Multiple Interest/Exp WACC s Interest/ | % Capital Exp Return % Capital Return Return 26 27 Bank LoanLIBOR + 4 00%) 28 Corporate Bonds 29 Equity 30 Total Sources 300,000.00 60,000.00 800% 500,000.00 31 32 33 Bank Loan Information 34 Amount Outstanding 18.000 35 Schedule Payments 36 Interest Payment 20,00020,000 20.000 222.000 37 Total Financing Payment Sheet 1

Explanation / Answer

Expected return of equity=1.7+(11-1.7)×1.4=14.72%

WACC=(60000/200000)×8×.66+(140000/200000)×14.72=11.88%

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