A B C D E F G 1 Valuation Methods - Equivalence of WACC, APV, CCF 2 3 Assumptions (in USD, at the end of each period) 4 Year0 Year1 Year2 Year3 Year4 Year5 5 Risk Free Rate (Rf) 3.0% 4.5% 5.0% 5.5% 6.0% 6 Market Risk Premium (MRP) 6.0% 6.0% 6.0% 6.0% 6.0% Tax Rate (tx) 40% 35% 30% 25% 25% Asset Beta ( or unlevered equity beta) 1.3 1.3 1.3 1.3 1.3 9 Debt Beta 0.35 0.3 0.25 0.25 0.2 10 EBIT $100,000 $104,000 $108,000 $109,000 $112,000 11 Depreciation $55,000 $57,200 $59,400 $59,950 $61,600 12 Capex $65,000 $67,600 $70,200 $70,850 $72,800 13 Increase in NWC $10,000 $10,400 $10,800 $10,900 $11,200 14 Debt $150,000 $125,000 $80,000 $50,000 $25,000 SO A B C D E F G 16 Free Cash Flow (FCF) 17 EBIT 100,000 104,000 108,000 109,000 112,000 18 - Taxes on EBIT -40,000 -36,400 -32,400 -27,250 -28,000 19 + Depreciation 55,000 57,200 59,400 59,950 61,600 20 - CAPEX -65,000 -67,600 -70,200 -70,850 -72,800 21 - Increase in NWC -10,000 -10,400 -10,800 -10,900 -11,200 22 =FCF 40,000 46,800 54,000 59,950 61,600