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).

CAPM ( Cost of Equity)= Risk-Free Rate + Beta (Market Return - Risk-Free Rate)

·      Interest expense/average Debt = Cost of Debt

·      Risk-Free rate = Guaranteed Expected Return

·      Market Return = 10-year S&P Growth

·      ß Beta: Volatility of the firm vs. the market

·      Unlevered FCF= Revenue- COGS- OpEx= EBIT-Taxes = NOPAT−ΔNWC−CapEx + DA

·      Levered FCF= Revenue – COGS – OpEx- Interest Expense- Taxes= Net Income−ΔNWC−CapEx + DA