TABLE OF CONTENTS Another case uses book values to estimate the WACC and use the correct cost of debt. In this case the cost of debt is estimated as above, with the yearly proportion of interest divided by the debt at the beginning of the year. In this case we proceed to show the TV calculations (depending on the levered value) and then we illustrate the calculation of the levered value. We omit the details of TV calculation (the TV depends on the levered market value). We simply present the FCF and the levered value and WACC calculation (see Table 11.16).
| 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| FCF with TV | ?21.00 | ?6.10 | 1.50 | 2.20 | 3.60 | 6.00 | 7.90 | 8.70 | 6.20 | 5.40 | 6.20 | 7.10 | 7.90 | 8.90 | 9.90 | 10.90 | 11.70 |
| D% | 90.80 | 94.80 | 82.40 | 55.90 | 36.70 | 21.60 | 5.30 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| d=Interest paid/debt (in %) | 17.50 | 13.80 | 11.40 | 10.90 | 9.40 | 9.40 | 9.30 | 9.30 | 9.20 | 9.40 | 9.40 | 9.40 | 9.40 | 9.40 | 9.40 | 9.40 | |
| d ? =d[1 ?T(1 ?i/d)] (in %) | 13.10 | 10.40 | 8.70 | 8.10 | 7.10 | 7.10 | 7.10 | 7.10 | 7.00 | 7.20 | 7.20 | 7.20 | 7.20 | 7.20 | 7.20 | 7.20 | |
| Contribution to WACC (in %) | 11.90 | 9.80 | 7.10 | 4.50 | 2.60 |
