Valuation

Adjusted Present Value (APV)
"Base case” valuation of firm (or project) assuming all-equity financing. Discount rate is Ra. Then, add financing side effects to the "base case" valuation:
1. Interest tax shields (PVTS)
2. Costs of financial distress (PVFD)

This app allows flexible FCF timing, cost of asset (Ra) as in all equity case and FCF repetition.
Beta
Un-lever asset beta from equity beta, debt beta, leverage (debt/equity), tax rate.
Re-lever asset beta with cost of debt, leverage (debt/equity) and tax rate to generate levered equity beta.
Capital Aset Pricing Model (CAPM)
Generate cost of capital from risk free rate, beta and market risk premium (MRP)
Weighted Average Cost of Capital (WACC)
Weighted average cost of capital is weighted average of the after tax cost of debt and cost of equity
WACC - Valuation
Values asset/firm from free cash flow (FCF), discount rate, horizon period (time taken to achive matured growth), terminal value (exit value, comparable, Gordon Growth Model).

 

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