Company Equity Beta Debt (m) Equity Value D/E T Unlev.

Beta
A 1.4 6.58 22.1 29.77% 30.00% 1.159
B 1.75 11.34 25.8 43.95% 30.00% 1.338
C 1.45 3.42 10 34.20% 30.00% 1.170
D 1.23 6.59 25.2 26.15% 30.00% 1.040
a. average 1.177

Rf 5.00%
MRP 5.50%
b. Re 11.4714%

2016 2017 2018 2019 2020

EBITDA $ 11,000,000.00 $ 12,100,000.00 $ 13,310,000.00 $ 14,641,000.00 $ 16,105,100.00
Dep. Exp $ 3,900,000.00 $ 4,300,000.00 $ 4,700,000.00 $ 5,100,000.00 $ 5,500,000.00
EBIT $ 7,100,000.00 $ 7,800,000.00 $ 8,610,000.00 $ 9,541,000.00 $ 10,605,100.00
Tax $ 2,130,000.00 $ 2,340,000.00 $ 2,583,000.00 $ 2,862,300.00 $ 3,181,530.00
NOPAT $ 4,970,000.00 $ 5,460,000.00 $ 6,027,000.00 $ 6,678,700.00 $ 7,423,570.00
Dep. Exp $ 3,900,000.00 $ 4,300,000.00 $ 4,700,000.00 $ 5,100,000.00 $ 5,500,000.00
Cap. Exp $ 4,000,000.00 $ 4,000,000.00 $ 4,000,000.00 $ 4,000,000.00 $ 4,000,000.00
FCF $ 4,870,000.00 $ 5,760,000.00 $ 6,727,000.00 $ 7,778,700.00 $ 8,923,570.00

Rd 14.00%
Tax 30%
Cap. Exp $ 4,000,000.00

Y 1 2 3 4 5
NPV $ 4,368,834.77 $ 4,635,491.62 $ 4,856,589.57 $ 5,037,947.72 $ 5,184,679.65
c. PV $ 24,083,543.33

Y 1 2 3 4 5
Int. Exp $ 6,300,000.00 $ 6,235,600.00 $ 6,040,288.80 $ 5,690,457.10 $ 5,159,103.90
Tax Sav. $ 1,890,000.00 $ 1,870,680.00 $ 1,812,086.64 $ 1,707,137.13 $ 1,547,731.17
NPV $ 1,657,894.74 $ 1,439,427.52 $ 1,223,106.87 $ 1,010,762.23 $ 803,843.07
PV Int Sav. $ 6,135,034.42

d. TV/EBITDA 5x
EBITDA 2020 $ 16,105,100.00
TV 2020 $ 80,525,500.00
TV 2015 $ 46,786,086.83 Calculating with Unlevered Re

Purchase Price $ 50,000,000.00

Debt % 90% Equity % 10%
Initial Debt $ 45,000,000.00 Initial Equity $ 5,000,000.00

PV of Equity Inv. $ 32,004,664.57

NPV of Acquisition $ 27,004,664.57