Formulas

WACC Formula

(Weights of Equity * Cost of Equity) + (Weightage of Debt * Cost of Debt) * (1 - Tax Rate)

Unlevered FCF

Revenue - COGS - OpEx = EBITDA - DA - EBIT - Taxes - ΔNWC - CapEx + DA

Enterprise Value to Equity Value

To find the equity value, subtract net debt (debt minus cash and investments) from the enterprise value.

CAPM (Cost of Equity)

Risk-Free Rate + Beta * (Market Return - Risk-Free Rate)

Cost of Debt

Interest expense divided by average debt.

Risk-Free Rate

The guaranteed expected return on an investment.

Market Return

The average return of the market, often measured by indices like the 10-year S&P Growth.

Beta (ß)

A measure of the volatility of a firm in comparison to the market.

Levered FCF

Revenue - COGS - OpEx - Interest Expense - Taxes = Net Income - ΔNWC - CapEx + DA

Earnings Per Share (ESP)

Net Income / Shares Outstanding

P/E Ratio

Market Cap / Net Income