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Stock-Research-Summary-MCD

VIEWS: 55 PAGES: 15

									            Discounted Cash Flow (DCF) S.A. includes the WACC, created by Wikiwealth.com, your source for investment research and
Investment research analysis for Wavecom for McDonald's Corp. wasdiscounted cash flow, EV Multiple, and Warren Buffett Calculator. analysis.                                                                          Warren Buffett calculation for McDonald's Corp.research and analysis. Wikiwealth.com, your for investment research and analysis.
                                                                                                                                                                                                                                WACC (discount rate) for investment Corp. was created by
                                                                                                                                               Enterprise Value (EV) multiple analysis for McDonald's Corp. was created by Wikiwealth.com, your sourcefor McDonald's was created by Wikiwealth.com, your sourcesource for investment research and analysis.




                                                                                                                          HOLD
  HOLD




    11%
                                                                                                                                                                                                                                                                                                                                                                        Home Page                                               McDona
                                                                                                                                                                                                                                                                                                                                                                        Full Research Report


                                                                                         Try The Experimental Mode for MCD                                                                                                                                                                                                                                             Enter Experimental Mode   Millions USD


                                                                            Target Price                                                                                                                                                                                Potential Change

                                                   $108.3                                                                                                                                                                                                                   11.3%                                                                                       HOLD                     Total Revenue
                                                                                                                                                                                                                                                                                                                                                                                                 % growth rate

                                                                                     Last Price                                                                                                                                                                                                           Riskiness                                                      Cash Flow Potential     - COGS
                                                                                                                                                                                                                                                                                                                                                                                                 % of revenue
                                                                 $97.3                                                                                                                                                                                   Medium                                                                                                            19%                   Gross Profit
                                                                                                   Analysis (rating, weight, potential)                                                                                                                                                                                                                                                          % of revenue
             Cash Flow                                                                                                                                    HOLD                                                                                                                                              70%                                                 19%        Potential Price
             Comparative                                                                                                                           -HOLD                                                                                                                                                    20%                                               (23%)                              - Operating Exp
             Buffett Calc
             Conclusion
                                                                                                                                                          HOLD
                                                                                                                                                          HOLD                                                                                                                                   100%
                                                                                                                                                                                                                                                                                                            10%                                                 23%
                                                                                                                                                                                                                                                                                                                                                                11%      $116                    % of revenue


                                                                                                                                                                                                                                                                                                                                                                                                 - SG&A (Op Ex)
                                                          Important Statistics & MCD SWOT Analysis                                                                                                                                                                                                                                                                         Last Stock Price      % of revenue
             WACC                                                                                                                                                                   7% Div Yield                                                                                                                                                                 n/a
             Cost of Debt
             Cost of Equity
                                                                                                                                                                                    5% ROIC
                                                                                                                                                                                    8% PEG Ratio
                                                                                                                                                                                                                                                                                                                                                                 5%
                                                                                                                                                                                                                                                                                                                                                                 1.7       $97                   EBITDA
                                                                                                                                                                                                                                                                                                                                                                                                 % of revenue
             Implied Debt Cost                                                                                                                                                      4% Market Cap                                                                                                                                                             99,189
             Risk Free Rate                                                                                                                                        3.2% Reinvest                                                                                                                                                                                14%                              - D & A (Op Ex)
             Interest Coverage                                                                                                                             15.3 x Beta                                                                                                                                                                                          0.41                             % of revenue


                                                                                         Top Competitor → Click To See All                                                                                                                                                                                                                                                                       EBIT (oper profits)
             McDonald's (MCD)                                                                                                                                                                                                                                                                                                                                 HOLD                               % of revenue
             Burger King (BKC)
             Good Times Restaurants (GTIM)                                                                                                                                                                                                                                                                                                                                                       - Taxes
             Yum! Brands (YUM)                                                                                                                                                                                                                                                                                                                                                                   % of EBIT
             CKE Restaurants (CKR)
             Carrols Restaurant (TAST)                                                                                                                                                                                                                                                                                                                                                           NOPAT
             Starbucks (SBUX)                                                                                                                                                                                                                                                                                                                                                                    % of revenue
             Wendy's Arby's (WEN)
             Jack in the Box (JACK)
             Morgan's Foods (MRFD)
             0 (0)                                                                                                                                                                                                                                                                                                                                                                               +D&A
                                                                                                                                                                                                                                                                                                                                                                                                 % of revenue
             Financial Stats                                                                                                                                                                                                   Competitors                                                                                                                     MCD
             Revenue Growth                                                                                                                                                                                                                                                                                           5%                                         4%                              - CapEx
             EBITDA Margin                                                                                                                                                                                                                                                                                  10%                                                 32%                              % of revenue
             EBIT Margin                                                                                                                                                                                                                                                                                              5%                                        27%
             Cash Flow Margin                                                                                                                                                                                                                                                                                         5%                                        16%                              Working Capital
             Taxes                                                                                                                                                                                                                                                                                          21%                                                 29%                              % of revenue
             Debt / Equity                                                                                                                                                                                                                                                                                  32%                                                 13%
             Return On Equity                                                                                                                                                                                                                                                                                         2%                                         5%                              - WC Investment
                                                                                                                                                                                                                                                                                                                                                                                                 % of revenue
             Multiple Stats                                                                                                                                                                                                                                                                                                                                    MCD
4.04923

             Revenue (x)                                                                                                                                                                                                                                                                                 2.2 x                                                 4.0 x                             Free Cash Flow
11.2643

             EBITDA (x)                                                                                                                                                                                                                                                                                  9.8 x                                                11.3 x                             % of revenue
13.1862

             EBIT (x)                                                                                                                                                                                                                                                                         14.5 x                                                          13.2 x
23.7256

             Cash Flow (x)                                                                                                                                                                                                                                                                    16.0 x                                                          23.7 x                             Present Value Factor
1.10247

             Book Value (x)                                                                                                                                                                                                                                                                              1.2 x                                                 1.1 x
18.7468

             PE Ratio (x)                                                                                                                                                                                                                                                                     47.3 x                                                          18.7 x                             Present Value of Free Cash Flows
                                Conclusion: Per Share Value


                                Invested Capital (Equity and Debt) Value
                                + Excess Cash
                                - Interest Bearing Debt, Preferred and Minority I


                                Equity Value (Net Present Value)


                                Divide: Shares Outstanding

                                Fair Value per Share


Notes on Analysis:
1. All numbers are in millions of US dollars. For valuation purposes, the currenc
                                  McDonald's (MCD) - Discounted Cash Flow Analysis (DCF)

                                    Historical Year Ended                                                               Projected Year Ending
                       2007       2008        2009      2010      2011         2012      2013      2014        2015        2016      2017       2018


                       22,787     23,522     22,745     24,075    27,006      29,166     30,041    30,943      31,871     32,827     33,812     34,826
                          n/a       3.2%       -3.3%     5.8%     12.2%         8.0%      3.0%      3.0%        3.0%        3.0%      3.0%       3.0%


                       14,881     14,883     13,953     14,437    16,319      18,102     18,645    19,204      19,781     20,374     20,985     21,615
                       65.3%       63.3%      61.3%     60.0%     60.4%        62.1%     62.1%     62.1%       62.1%       62.1%     62.1%      62.1%


                        7,905      8,639       8,792     9,637    10,687      11,064     11,396    11,738      12,090     12,453     12,827     13,212
                       34.7%       36.7%      38.7%     40.0%     39.6%        37.9%     37.9%     37.9%       37.9%       37.9%     37.9%      37.9%


                        2,835      2,823       2,702     2,362     2,394       3,208      3,305     3,404       3,506       3,611     3,719      3,831
                       12.4%       12.0%      11.9%      9.8%      8.9%        11.0%     11.0%     11.0%       11.0%       11.0%     11.0%      11.0%


                        1,621      1,616       1,486     1,086      979        1,522      1,406     1,280       1,146       1,003      850        687
                        7.1%        6.9%       6.5%      4.5%      3.6%         5.2%      4.7%      4.1%        3.6%        3.1%      2.5%       2.0%


                        6,284      7,024       7,306     8,551     9,708       9,542      9,991    10,458      10,944     11,450     11,977     12,524
                       27.6%       29.9%      32.1%     35.5%     35.9%        32.7%     33.3%     33.8%       34.3%       34.9%     35.4%      36.0%


                        1,214      1,208       1,216     1,276     1,415       1,686      1,899     2,123       2,360       2,608     2,869      3,144
                         5.3%       5.1%        5.3%      5.3%      5.2%        5.8%       6.3%      6.9%        7.4%        7.9%      8.5%       9.0%


                        5,070      5,816       6,090     7,275     8,293       7,856      8,092     8,334       8,585       8,842     9,107      9,381
                       22.3%       24.7%      26.8%     30.2%     30.7%        26.9%     26.9%     26.9%       26.9%       26.9%     26.9%      26.9%


                        1,237      1,845       1,936     2,054     2,509       2,300      2,369     2,440       2,514       2,589     2,667      2,747
                       24.4%       31.7%      31.8%     28.2%     30.3%        29.3%     29.3%     29.3%       29.3%       29.3%     29.3%      29.3%


                        3,833      3,971       4,154     5,221     5,784       5,556      5,722     5,894       6,071       6,253     6,441      6,634
                       16.8%       16.9%      18.3%     21.7%     21.4%        19.0%     19.0%     19.0%       19.0%       19.0%     19.0%      19.0%

                                                                         Free Cash Flow to the Firm Analysis


                        1,214      1,208       1,216     1,276     1,415       1,686      1,899     2,123       2,360       2,608     2,869      3,144
                        5.3%        5.1%       5.3%      5.3%      5.2%         5.8%      6.3%      6.9%        7.4%        7.9%      8.5%       9.0%


                        1,947      2,136       1,952     2,136     2,730       2,948      3,037     3,128       3,222       3,318     3,418      3,521
                        8.5%        9.1%       8.6%      8.9%     10.1%        10.1%     10.1%     10.1%       10.1%       10.1%     10.1%      10.1%


                         (907)    (1,052)     (1,350)     (935)   (1,075)      (1,161)   (1,196)   (1,232)     (1,269)     (1,307)   (1,346)    (1,386)
                        -4.0%      -4.5%       -5.9%     -3.9%     -4.0%       -4.0%      -4.0%     -4.0%       -4.0%       -4.0%     -4.0%      -4.0%


                          n/a       (145)       (298)     415       (140)         (86)      (35)      (36)        (37)        (38)      (39)       (40)
                          n/a      -0.6%       -1.3%     1.7%      -0.5%       -0.3%      -0.1%     -0.1%       -0.1%       -0.1%     -0.1%      -0.1%


                          n/a      3,188       3,716     3,946     4,609       4,379      4,620     4,926       5,246       5,581     5,931      6,297
                          n/a      13.6%      16.3%     16.4%     17.1%        15.0%     15.4%     15.9%       16.5%       17.0%     17.5%      18.1%


Present Value Factor             Industry WACC              7%                 0.933      0.870     0.812       0.757       0.707     0.659      0.615


Present Value of Free Cash Flows            Lt Grth         3%                 4,086      4,020     3,999       3,973       3,943     3,910      3,873
Conclusion: Per Share Value                                                                       Working Capital Inputs               2007      2008


nvested Capital (Equity and Debt) Value                                      128,528              Current Assets                     3,582      3,518
                                                                               2,336              - Excess Cash                      1,981      2,063
- Interest Bearing Debt, Preferred and Minority Interest                      12,500              - Current Liabilities              4,499      2,538
                                                                                                  + Short Term Debt                  1,991         32
Equity Value (Net Present Value)                                             118,364              Working Capital                     (907)    (1,052)
                                                                                                  % of revenue                       -4.0%      -4.5%
Divide: Shares Outstanding                                                     1,019
                                                                                                  Interest Exp (net)                   410        523
Fair Value per Share                                                            $116              Total Debt                         9,301     10,218



US dollars. For valuation purposes, the currency and stock price do not matter, because potential is a relative figure. The higher the potential the better.
 sis (DCF)                                        Home Page                                                             McDonald's (MCD)
                                                  Full Research Report


Year Ending                                      Enter Experimental Mode                                        Ent Value        Revenue Growth
              2019      2020      Stable >                                                                       Current          -1yr


              35,871
               3.0%
                        36,947
                         3.0%
                                   38,056
                                     3.0%
                                                 -HOLD                       McDonald's
                                                                             Burger King
                                                                                                                  109,353
                                                                                                                    3,263
                                                                                                                                 12%


                                                                             Good Times Restaurants                        6      1%
              22,263    22,931     23,619           Multiples Potential      Yum! Brands                           35,764        11%
              62.1%     62.1%      62.1%                                     CKE Restaurants                               3


              13,608    14,016     14,437
                                                  (23%)                      Carrols Restaurant
                                                                             Starbucks
                                                                                                                        599
                                                                                                                   43,929
                                                                                                                                  3%
                                                                                                                                  9%
              37.9%     37.9%      37.9%                                     Wendy's Arby's                         2,766       -29%
                                                     Potential Price         Jack in the Box                        1,470         -5%
               3,946     4,064      4,186                                    Morgan's Foods
              11.0%     11.0%      11.0%
                                                     $75                     0


                514       329         339                                    Low Value                                     3    -29%
               1.4%      0.9%        0.9%            Last Stock Price        High Value                            43,929        11%
                                                                             Average Value                         10,975         -1%
              13,094
              36.5%
                        13,687
                        37.0%
                                   14,097
                                   37.0%
                                                     $97                     Median Value                           2,118         2%

                                                                                                  McDonald's vs. their Competitors (+ means target compa
               3,432    3,735      3,847                                                                        Ent Value        Revenue Growth
                9.6%    10.1%      10.1%                                     Low Value                              +            +
                                                                             High Value                             +            +
               9,662     9,952     10,250                                    Average Value                          +            +
              26.9%     26.9%      26.9%                                     Median Value                           +            +
                                                                             Advantages v. Competitors            100%          81%
               2,829     2,914      3,001
              29.3%     29.3%      29.3%     Notes on Analysis:
                                             1. WikiWealth uses quantitative measures to determine the multiple range.
               6,833     7,038      7,249    2. Free cash flow to the firm (FCF) multiple is free cash flow to equity holders plus interest owed to debt hold
              19.0%     19.0%      19.0%     3. Multiples incorporate benefits due to economies of scale; WikiWealth compares absolute EV to competito
                                             4. We exclude outliers in the individual company multiples.

                                             Additional Calculations
               3,432     3,735      3,847
               9.6%     10.1%      10.1%                                                                                 Financial Analysis
                                             Stock Research                                                   Revenue          EBITDA
               3,626     3,735      3,847
              10.1%     10.1%      10.1%     McDonald's                                                             27,006      9,708
                                             Burger King
              (1,428)   (1,471)              Good Times Restaurants                                                     21           1
               -4.0%     -4.0%               Yum! Brands                                                           12,626       2,390
                                             CKE Restaurants
                 (42)      (43)       (44)   Carrols Restaurant                                                         822       69
               -0.1%     -0.1%      -0.1%    Starbucks                                                             11,700       2,278
                                             Wendy's Arby's                                                         2,431        286
               6,680     7,081      7,293    Jack in the Box                                                        2,193        177
              18.6%     19.2%      19.2%     Morgan's Foods
                                             0
               0.574     0.535      0.535
                                             Average Value                                                           8,114      2,130
               3,833     3,790     93,102
                               2009     2010      2011


                           3,416       4,369     4,403
                           1,796       2,387     2,336
                           2,989       2,925     3,509
                                18         8      367
                          (1,350)       (935)   (1,075)
                           -5.9%       -3.9%     -4.0%


                               473      451       493
                         10,578       11,505    12,500



er the potential the better.
        McDonald's (MCD) - Comparative (EV) Multiples

               Revenue Growth           EBITDA Margin                 EBIT Margin        Cash Flow Margin           Enterprise Value Multiples
                        -5yr    +5yr    -1yr     -5yr   +5yr      -1yr    -5yr   +5yr    -1yr   -5yr   +5yr    Rev        EBITDA     EBIT       FCF


                        4%       4%     33%     32%     34%       27%     27%    27%     15%    27%    16%      4.0 x       11.3 x   13.2 x     23.7 x Include
                                                                                                                                                         Include
                        -4%      3%     6%        1%        6%    1%      -4%       1%    0%    -4%     0%          n/m      5.8 x                4.1 x Include
                        5%       4%     19%     19%     20%       14%     14%    14%      9%    14%    10%      2.8 x       15.0 x      n/m     28.7 x Include
                                                                                                                                                         Include
                        1%       3%     9%      10%         9%    6%       6%       6%    5%    6%      5%      0.7 x        8.7 x   15.8 x       9.1 x Include
                        6%       5%     19%     15%     19%       14%     10%    14%     10%    10%    10%      3.8 x         n/m       n/m        n/m Include
                       27%       3%     9%        6%        8%    4%       0%       4%    8%    0%      7%      1.1 x        9.7 x      n/m     14.1 x Include
                        -3%      2%     11%     10%     11%       6%       6%       6%    2%    6%      2%      0.7 x        8.3 x      n/m        n/m Include
                                                                                                                                                         Include
                                                                                                                                                         Include


                        -4%      2%     6%        1%        6%    1%      -4%       1%    0%    -4%     0%     0.7 x        5.8 x    13.2 x     4.1 x
                       27%       5%     19%     19%     20%       14%     14%    14%     10%    14%    10%     4.0 x       15.0 x    15.8 x     28.7 x
                        5%       3%     12%     10%     12%       7%       5%       7%    6%    5%      6%     2.2 x        9.8 x    14.5 x     16.0 x
                        3%       3%     10%     10%     10%       6%       6%       6%    7%    6%      6%     2.0 x        9.2 x    14.5 x     14.1 x

s. their Competitors (+ means target company ratios better than competitor ratios)                                        Concluded Range
               Revenue Growth           EBITDA Margin                 EBIT Margin        Cash Flow Margin      High         High    High     High
                        +       +       +        +          +     +       +         +    +      +       +                 Concluded Multiple
                                        +        +          +     +       +         +    +      +       +      2.2 x        9.8 x    14.5 x     16.0 x
                                +       +        +          +     +       +         +    +      +       +              Potential per Multiple
                        +       +       +        +          +     +       +         +    +      +       +      -50%         -15%     11%        -36%
                        =      High 100%         =      High 100%         =      High 100%      =      High   Conclusion                        (23%)



iple range.
quity holders plus interest owed to debt holders.
Wealth compares absolute EV to competitors.




        Financial Analysis                     Enterprise Value Calculation                                   Rev         EBITDA     EBIT       FCF
                     EBIT      FCFF
                                               Current Financial Results                                       27,006        9,708    8,293      4,609
                      8,293 4,609              Multiple x                                                       2.2 x        9.8 x   14.5 x     16.0 x
                                               Multiple Calculation                                            59,295 94,915 120,089 73,547
                                    1
                     1,762 1,245               Enterprise Value
                                               Less: Total Debt                                                12,500 12,500 12,500 12,500
                        38       66            Plus: Excess Cash                                                2,336        2,336    2,336      2,336
                     1,728 1,043               = Stock Holder's Equity Capital                                 49,131 84,751 109,925 63,383
                       141      196
                        81       17            Divide: Shares Outstanding                                       1,019        1,019    1,019      1,019
                                               = Fair Value per Share                                                48        83       108         62


                                               Current Stock Price                                                 97           97       97         97
                      2,007 1,025              Potential Stock Increase                                         -50%         -15%      11%       -36%
   Home Page                                                      McDonald's (MCD) - Warren Buffett Va
   Full Research Report


 Enter Experimental Mode                            Historical Financials (% of revenue)
                              Financial Results         2007     2008     2009     2010    2011   Ave


   HOLD                       Revenue Growth
                              Gross Profit
                                                           n/a
                                                          35%
                                                                    3%
                                                                   37%
                                                                            -3%
                                                                            39%
                                                                                      6%
                                                                                     40%
                                                                                            12%
                                                                                            40%
                                                                                                   4%
                                                                                                  38%
                              EBITDA Margin               28%      30%      32%      36%    36%   32%
      Buffett Potential       EBIT Margin                 22%      25%      27%      30%    31%   27%
                              Tax Rates                   24%      32%      32%      28%    30%   29%

      23%                     NOPAT
                              D&A
                                                          17%
                                                           5%
                                                                   17%
                                                                    5%
                                                                            18%
                                                                             5%
                                                                                     22%
                                                                                      5%
                                                                                            21%
                                                                                             5%
                                                                                                  19%
                                                                                                   5%

       Potential Price        Capital Expenditure          9%       9%       9%       9%    10%    9%


    $119
                              Working Capital Inv         -4%      -4%      -6%      -4%    -4%   -4%
      Last Stock Price


      $97                     Free Cash Flow               n/a     14%      16%      16%    17%   16%

     Investment Score


      80%
Notes on Analysis:
1. The Warren Buffett Valuation model is an experimental model developed to mimic the investment approach used by Warren Buffett, the
 (MCD) - Warren Buffett Value Calculator                                                                                        Home Page
                                                                                                                                 Full Research Report
                                                                                                                    \




                       Buffett          Criteria / Questions / Score            Buffett Intrinsic Value Calc
                       Results
                                                                                                                        WACC
                         9%       Consistency                                   Buffett Formula (FCF/RFR)               WACC Inputs
                        75%       Consistency           Pass       5%                                                   Risk Free Rate
                        15%       Consistency           Pass       5%       Free Cash Flow (fcf)           4,401        Cost of Debt
                        13%       Consistency           Pass       5%       Risk-Free Rate (rfr)            3.2%        Equity Risk Prem
                        30%       Consistency           Pass       5%       Buffett Fair Value (EV)   137,540           Alpha
                         9%       Consistency           Pass       5%                                                   Country Risk Premium
                         3%       Consistency           Pass       5%           Enterprise Value (EV) Calc
                                                                                                                        Industry WACC Calculation
                         5%       Consistency           Pass       5%       + Cash                         2,336        Beta (unlevered)
                                  < Buffett Portfolio                       - Debt & Minority Int       12,500          Industry D/E
                                  Low                   Pass       5%       Equity Capital            127,376           Tax Rate (5 yrs)
                                                                                                                        Beta (relevered)
                         0%       Consistency                               Shares                         1,019
                                  < Buffett Portfolio   Pass       10%                                                  Cost of Debt (after-tax)
                                  < Rev Growth          Pass       5%       Potential Stock Price      $    125         Debt / Capital
                                                                            Current Stock Price        $       97       WAC (debt)
                         6%       Consistency           Pass       5%       Potential Return                28%
                                  > Buffett Portfolio   Pass       20%      Investment Score                80%         Cost of Equity (capm)
                                                                                                                        Equity / Capital
                                  Investment Score                 80%      Adjusted Potential              23%         WAC (equity)


                                                                                                                        WACC Conclusion




                                                                                                                        Notes on Analysis:
e investment approach used by Warren Buffett, the most successful investor of all time.
                                                                                                                        1. The WACC (discount rate) calculation uses c
                                                                                                                        over the long term. If there are any short-term d
                                                                                                                        likely to revert to the industry WACC (discount r


                                                                                                                        2. The WACC calculation uses the higher of the
                                                                                                                        occur if the beta is negative and the company us
    Home Page                                                             McDonald's (MCD) - WACC Discount Rate
    Full Research Report


                                                                    Calculation to Find the Industry Average Estimates for the WACC Calculation (Millions USD)
                        7%
                                                                                                      Beta
                                     Name (click for report)                             Price       levered   Debt       Shares    Equity   Capital
                             3.2%
                             5.0%    McDonald's                                         $    97       0.41     12,500       1,019   99,189   111,689
                             5.0%    Burger King                                        $    24       0.80            0      136     3,263     3,263
                             0.0%    Good Times Restaurants                             $        2    1.75            2        3         5         7
                             0.0%    Yum! Brands                                        $    73       0.96      3,410        460    33,552    36,962
                                     CKE Restaurants                                    $        0    0.78            0       31         3         3
stry WACC Calculation                Carrols Restaurant                                 $    15       2.02       279          23       345       624
                              0.80 Starbucks                                            $    60       1.20       552         753    45,428    45,980
                            12.6%    Wendy's Arby's                                     $        5    0.93      1,357        390     1,884     3,241
                            20.7%    Jack in the Box                                    $    23       0.74       469          44     1,012     1,481
                              0.88 Morgan's Foods
                                     0
                             4.0%
                            11.2%    Median (middle #)                                                0.93       469         136     1,884     3,241
                             0.4%


                             7.6%
                            88.8%
                             6.7%


                             7.2%




he WACC (discount rate) calculation uses comparable companies to produce a single WACC (discount rate). An industry average WACC (discount rate) is the most accurate
 the long term. If there are any short-term differences between the industry WACC and an individual company's WACC (discount rate), then the companies WACC (discount
  to revert to the industry WACC (discount rate) over the long term.


he WACC calculation uses the higher of the WACC or the risk free rate, because no investment can have a cost of capital that is better than risk free. This situation may
 r if the beta is negative and the company uses a significant proportion of equity capital.
Discount Rate

ACC Calculation (Millions USD)


                        Debt       Debt               Beta
                       Equity     Capital   Tax %    unlever


                        12.6%      11.2%     29.3%      0.38 Include
                          0.0%       0.0%     0.0%      0.80 Include
                        41.9%      29.5%     30.0%      1.35 Include
                        10.2%        9.2%    20.7%      0.89 Include
                          0.0%       0.0%     0.0%      0.78 Include
                        80.8%      44.7%     15.8%      1.20 Include
                          1.2%       1.2%    32.4%      1.19 Include
                        72.0%      41.9%     20.0%      0.59 Include
                        46.3%      31.7%     45.1%      0.59 Include




                        12.6%      11.2%     20.7%      0.80




e WACC (discount rate) is the most accurate for a company
t rate), then the companies WACC (discount rate) is more



better than risk free. This situation may

								
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