7/30/2019 CVMA Practice
1/14
BV of Debt 16003
MV of Debt 14962
PV of Operating Lease 1720
Total MV of Debt 16682
MP per Share 24.34No of Shares 1856.752
Total MV of Equity 45193
Debt+Equity 61875 Ke
D/E 0.37 After Tax Kd
Beta 0.9011 Debt Proportion
Tax Rate 38% Equity Proportion
Unlevered Beta 0.73 WACC
Rfr 3.50%
Rm-Rfr 6%
Debt D/E Levered Beta Cost of Equity
0% 0.00 0.73 7.90%
10% 0.11 0.78 8.20%
20% 0.25 0.85 8.58%
30% 0.43 0.93 9.07%
40% 0.67 1.04 9.72%
50% 1.00 1.19 10.63%
60% 1.50 1.42 11.99%
70% 2.33 1.79 14.26%80% 4.00 2.55 18.81%
90% 9.00 4.82 32.45%
Last Fiscal Year Trailing 12 month
Revenue 37843 36990
EBITDA 8986 8319
Depriciation 1582 1593
EBIT 7404 6726
Interest 712 728
EBITDA (Adjusted for lease) 9989 8422
EBIT ( Adjusted for lease) 7708 6829
Interest (Adjusted for lease) 815 831
D/(D+E) 0% 10% 20%
D/E 0.00 0.11 0.25
Debt 0 6188 12375
EBIT 6829 6829 6829
Effect of moving to higher Debt
7/30/2019 CVMA Practice
2/14
Interest 0 294 588
Pre Tax Interest coverage - 23.24 11.62
Likely rating AAA AAA AAA
Pre Tax Cost of Debt 4.75% 4.75% 4.75%
After Tax Cost of Debt 2.95% 2.95% 2.95%
Debt to Capital Cost of Equity After Tax Cost of Debt CoC0% 7.90% 2.95% 7.90%
10% 8.20% 2.95% 7.68%
20% 8.58% 2.95% 7.45%
30% 9.07% 3.26% 7.32%
40% 9.72% 3.72% 7.32%
50% 10.63% 4.03% 7.33%
60% 11.99% 4.34% 7.40%
70% 14.26% 7.44% 9.49%
80% 18.81% 8.37% 10.46%
90% 32.45% 8.37% 10.78%
EBIT 6829
Tax -2595.02
PAT 4234
(+)Depriciation 1593
(-)Capex -1628
FCFF 4199
Current WACC
Particulars Amount Weight Cost of CapitalTotal Debt 16682 26.96% 3.72%
MV of Equity 45193 73.04% 8.91%
Total 61875 100.00%
Cost of Financing at 7.32% 4528.59
Cost of Financing at 7.51% 4645.73
Annual Saving 117.14
Current g 0.676%
New value of Firm 63638.38
Current Value 61875
PV of Saving 1763.38
No Of Shares 1856.75
Increase in value per share 0.95
Current price 24.34 Particulars Book Value
New Price 25.29 Total Debt 16003
No of share after buyback 1468.41 Total Equity
New Price after Buyback 26.00
7/30/2019 CVMA Practice
3/14
8.91%
3.72%
26.96%
73.04%
7.51%
30% 30% 40% 40% 40% 50% 50% 60% 60%
0.43 0.43 0.67 0.67 0.67 1.00 1.00 1.50 1.50
18563 18563 24750 24750 24750 30938 30938 37125 37125
6829 6829 6829 6829 6829 6829 6829 6829 6829
7/30/2019 CVMA Practice
4/14
882 975 1299 1423 1485 1856 2011 2413 2599
7.75 7.01 5.26 4.80 4.60 3.68 3.40 2.83 2.63
AA AA A+ A A A- A- BBB BBB
4.75% 5.25% 5.25% 5.75% 6.00% 6.00% 6.50% 6.50% 7.00%
2.95% 3.26% 3.26% 3.57% 3.72% 3.72% 4.03% 4.03% 4.34%
WACC1.00%
6.51%
7.51%
New Difference
25455.35 9452.352195
38183.03
7/30/2019 CVMA Practice
5/14
70% 70% 70% 70% 70% 70% 80% 80% 90%
2.33 2.33 2.33 2.33 2.33 2.33 4.00 4.00 9.00
43313 43313 43313 43313 43313 43313 49500 49500 55688
6829 6829 6829 6829 6829 6829 6829 6829 6829
7/30/2019 CVMA Practice
6/14
3032 3357 3682 4115 4656 5198 5940 6683 7518
2.25 2.03 1.85 1.66 1.47 1.31 1.15 1.02 0.91
BB+ BB B+ B B- B- CCC CCC CCC
7.00% 7.75% 8.50% 9.50% 10.75% 12.00% 12.00% 13.50% 13.50%
4.34% 4.81% 5.27% 5.89% 6.67% 7.44% 7.44% 8.37% 8.37%
7/30/2019 CVMA Practice
7/14
BV of Debt 16003
MV of Debt 14962
PV of Operating Lease 1720
Total MV of Debt 16682
MP per Share 24.34No of Shares 1856.752
Total MV of Equity 45193
Value of levered Firm 61875 Ke
Tax Advantage 6339.16 After Tax Kd
Probability of Bankrupty 0.51% Debt Proportion
Pv of Bankrupty costs 78.89 Equity Proportion
Value of Unlevered Firm 55456.95 WACC
Rfr 3.50%
Rm-Rfr 6%
Debt Debt Tax Rate Tax Benefit
0% 0 38% 0
10% 6188 38% 2351
20% 12375 38% 4703
30% 18563 38% 7054
40% 24750 38% 9405
50% 30938 38% 11756
60% 37125 38% 14108
70% 43313 38% 1645980% 49500 38% 18810
90% 55688 38% 21161
Last Fiscal Year Trailing 12 month
Revenue 37843 36990
EBITDA 8986 8319
Depriciation 1582 1593
EBIT 7404 6726
Interest 712 728
EBITDA (Adjusted for lease) 9989 8422
EBIT ( Adjusted for lease) 7708 6829
Interest (Adjusted for lease) 815 831
D/(D+E) 0% 10% 20%
D/E 0.00 0.11 0.25
Debt 0 6188 12375
EBIT 6829 6829 6829
Effect of moving to higher Debt
7/30/2019 CVMA Practice
8/14
Interest 0 294 588
Pre Tax Interest coverage - 23.24 11.62
Likely rating AAA AAA AAA
Pre Tax Cost of Debt 4.75% 4.75% 4.75%
After Tax Cost of Debt 2.95% 2.95% 2.95%
Debt to Capital Cost of Equity After Tax Cost of Debt CoC0% 0.00% 2.95% 0.00%
10% 235125.00% 2.95% 211612.79%
20% 470250.00% 2.95% 376200.59%
30% 705375.00% 3.26% 493763.48%
40% 940500.00% 3.72% 564301.49%
50% 1175625.00% 4.03% 587814.52%
60% 1410750.00% 4.34% 564302.60%
70% 1645875.00% 7.44% 493767.71%
80% 1881000.00% 8.37% 376206.70%
90% 2116125.00% 8.37% 211620.03%
EBIT 6829
Tax -538744.0781
PAT -531915
(+)Depriciation 1593
(-)Capex -1628
FCFF -531950
Current WACC
Particulars Amount Weight Cost of CapitalTotal Debt 16682 26.96% 3.72%
MV of Equity 45193 73.04% 3.53%
Total 61875 100.00%
Cost of Financing at 7.32% 349161545.70
Cost of Financing at 7.51% 2216.15
Annual Saving -349159329.55
Current g -113.634%
New value of Firm 12.85
Current Value 61875
PV of Saving -61862.15
No Of Shares 1856.75
Increase in value per share -33.32
Current price 24.34 Particulars Book Value
New Price -8.98 Total Debt 16003
No of share after buyback 2514.02 Total Equity
New Price after Buyback 0.00
7/30/2019 CVMA Practice
9/14
3.53%
3.72%
26.96% Aspire V5-431
73.04%
3.58%
Rating of Firm Bankrupty Cost
AAA 11
AAA 11
AAA 11
AA 79
A 102
A- 387
BBB 1166
B- 6961CCC 9128
CCC 9128
30% 30% 40% 40% 40% 50% 50% 60%
0.43 0.43 0.67 0.67 0.67 1.00 1.00 1.50
18563 18563 24750 24750 24750 30938 30938 37125
6829 6829 6829 6829 6829 6829 6829 6829
7/30/2019 CVMA Practice
10/14
882 975 1299 1423 1485 1856 2011 2413
7.75 7.01 5.26 4.80 4.60 3.68 3.40 2.83
AA AA A+ A A A- A- BBB
4.75% 5.25% 5.25% 5.75% 6.00% 6.00% 6.50% 6.50%
2.95% 3.26% 3.26% 3.57% 3.72% 3.72% 4.03% 4.03%
WACC1.00%
2.58%
3.58%
New Difference
5.139999713 -15997.86
7.70999957
7/30/2019 CVMA Practice
11/14
60% 70% 70% 70% 70% 70% 70% 80% 80%
1.50 2.33 2.33 2.33 2.33 2.33 2.33 4.00 4.00
37125 43313 43313 43313 43313 43313 43313 49500 49500
6829 6829 6829 6829 6829 6829 6829 6829 6829
7/30/2019 CVMA Practice
12/14
2599 3032 3357 3682 4115 4656 5198 5940 6683
2.63 2.25 2.03 1.85 1.66 1.47 1.31 1.15 1.02
BBB BB+ BB B+ B B- B- CCC CCC
7.00% 7.00% 7.75% 8.50% 9.50% 10.75% 12.00% 12.00% 13.50%
4.34% 4.34% 4.81% 5.27% 5.89% 6.67% 7.44% 7.44% 8.37%
7/30/2019 CVMA Practice
13/14
90%
9.00
55688
6829
7/30/2019 CVMA Practice
14/14
7518
0.91
CCC
13.50%
8.37%