Valuing Rio Corporation

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Valuing Rio Corporation
	year 0	year 1	year 2	year 3	year 4	year 5	year 6	year 7
	sales growth	6.70%	7%	7%	7%	4%	4%	4%	3%
	costs	75.50%	74%	74.50%	74.50%	75%	75%	75.50%	76%
	working capital	13.30%	13%	13%	13%	13%	13%	13%	13%
	net fixed assets	79.20%	79%	79%	79%	79%	79%	79%	79%
	depreciation(os fixed assets)	5%	14%	14%	14%	14%	14%	14%	14%
	tax rate	35%	35%	35%	35%	35%	35%	35%	35%
	WACC	9%
	Long Term Growth	3%
	Debt	36
	Cost of Debt	6%
	OPERATING CASH FLOW
	Sales	83.6	89.5	95.7	102.4	106.5	110.8	115.2	118.7
	Cost of good capital	63.1	66.2	71.3	76.3	79.9	83.1	87.0	90.2
	EBITDA	20.5	23.3	24.4	26.1	26.6	27.7	28.2	28.5
	Depreciation	3.3	9.9	10.6	11.3	11.8	12.3	12.7	13.1
	EBIT	17.2	13.4	13.8	14.8	14.8	15.4	15.5	15.4
	tax	6.0	4.7	4.8	5.2	5.2	5.4	5.4	5.4
	profit after taxes	11.2	8.7	9.0	9.6	9.7	10.0	10.1	10.0
	OFC	14.5	18.6	19.6	20.9	21.4	22.3	22.8	23.1
	Net working capital	11.1	11.6	12.4	13.3	13.8	14.4	15.0	15.4
	Investment in Working Capital	0.5	0.8	0.9	0.5	0.6	0.6	0.4
	Net fixed assets	66	70.7	75.6	80.9	84.1	87.5	91.0	93.7
	Accumulated Depreciation	29	38.9	49.5	60.8	72.6	84.8	97.6	110.7
	Gross Fixed Assets	95	109.6	125.1	141.7	156.7	172.3	188.6	204.4
	Investment in Fixed Assets	14.6	15.5	16.6	15.0	15.6	16.2	15.9
	FREE CASH FLOW	3.5	3.2	3.4	5.9	6.1	6.0	6.8
	PV(CF1-6)	$20.29
	PV(horizon value) at year 6	$113.35
	PV(horizon value) at year 0	$67.58
	VALUE OF COMPANY	$87.88
	VALUE OF EQUITY	$51.88
	Debt Change	Adjusted Present Value
	year 0	year 1	year 2	year 3	year 4	year 5	year 6	year 7
	use FCF already calculated
	Cost of Capital(COC)	9.84%
	tax rate	35%
	Debt	51	50	49	48	47	46	45
	Interest	6%	3.06	3	2.94	2.88	2.82	2.76	2.6999999999999997
	Tax Shield	1.9890000000000001	1.9500000000000002	1.911	1.8719999999999999	1.833	1.7939999999999998	1.7549999999999999
	PV(tax shield-6%	R$9.14
	PV(CF 1-6)-COC	58.50	19.73	<-Resp certa
	PV(horizon Value)-at year 0-COC	R$64.54
	VALUE OF COMPANY	R$73.68	93.41
	VALUE OF EQUITY	R$37.68	42.41