Group no: 25

Group Details :
Name Id

Al Mana B160203055

Sibgat Ullah B160203063

Jagannath Dey B160203076

Shawon Baroi B160203125

 Valuation of Air Thread Connections

Without Synergies With Synergies

• Backhaul cost
• Backhaul savings

1st they will propose value without synergies then they will propose value with
synergies
 Free cash flow Tax shield

NOPLAT
Interest * interest rate
(+) Depreciation & Amortization
(-) Changes in Net Working Capital
(-) Capital Expenditure
Free Cash Flows

FCF (1  g )
Terminal value
wacc  g

Value of operating assets= pv of ( free cash flow + tax shield+ terminal value)
 Value of non operating assets

Investment in equity in affialates * (P/E) ratio

𝐸𝑞𝑢𝑖𝑡𝑦_𝑚𝑎𝑟𝑘𝑒𝑡_𝑣𝑎𝑙𝑢𝑒
Investment in equity in affialates * 𝑁𝑒𝑡_𝑖𝑛𝑐𝑜𝑚𝑒

Note: The company who have hase negative net income will be excluded
 Calculation of “BETA”

Industry Beta Unlevered Beta Relevered Beta

Beta(current ) Debt
Average of beta
from industry
Beta(unlevered ) 
1  (1  tax)
Debt Beta(Re levered)  Beta(unlevered)*{1 (1 tax) }
Equity Equity
 Calculation of Growth rate

Return on capital * Reinvestment rate

NOPLAT NOPLAT
*
DEBT  EQUITY CAPEX WORKING _ CAPITAL  DEPRECIATION

NOPLAT will be calculated from Income Statement

 WACC

= WEIGHT*COST OF DEBT+(1-WD)*COST OF EQUITY

• 10 YEAR GVT RREASRY BILL=4.25%

• Cost of DEBT(BBB+) =5.5%
• Equity Risk Premium =5.5%

When we use 10% debt, Then the weight of debt=(10/100) and the weigh of
equity will be =(100-10)/100
 Adjustments of IS rand Balance sheet ratios

Accounts Re ceivable
Acc _ Re ceivable _ Turnover 
Average _ Daily Re venue
Re ceivable _ Turnover * Average _ daily _ sales  Accounts _ Re ceivable

Prepaid expense= Total revenue*(% of prepaid expense)

PV of Free cash flow PV of Tax shield PV of Terminal value

Value of non-operating assets

Value of non operating assets

Cash and cash Equivalent

Enterprise value
 Enterprise _ value
Actual Enterprise value =
1  Illiquidity _ discount

ILLIQUIDITY DISCOUNT 10%

1st OFFER 9039.072
2nd OFFER 12621.27

If they reject first offer then ACC will offer second offer to
the ATC