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

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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

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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%