Assignment: Corporate Finance

Analysis of Cadila Healthcare Limited

1 Balance Sheet
2 P&L Account
3 Cash Flow Statement
4 Financial Ratios
5 Historical Stock Data
6 Cost of Capital
7 Capital Structure

Cadila Healthcare Ltd.

BSE ID
532321
NSE ID
CADILAHC
ISIN ID
INE010B01019

Sandeep K Biswal
Roll No. 2027
PGPSM 2011-12
NISM

Cadila Healthcare
Balance Sheet
Mar '07
12 mths
Sources Of Funds
Total Share Capital
Equity Share Capital
Share Application Money
Preference Share Capital
Reserves
Revaluation Reserves
Networth
Secured Loans
Unsecured Loans
Total Debt
Total Liabilities
Application Of Funds
Gross Block
Less: Accum. Depreciation
Net Block
Capital Work in Progress
Investments
Inventories
Sundry Debtors
Cash and Bank Balance
Total Current Assets
Loans and Advances
Fixed Deposits
Total CA, Loans & Advances
Deffered Credit
Current Liabilities
Provisions
Total CL & Provisions
Net Current Assets
Miscellaneous Expenses
Total Assets
Contingent Liabilities
Book Value (Rs)

------------------- in Rs. Cr. ------------------Mar '08

Mar '09
Mar '10
12 mths
12 mths
12 mths

Mar '11
12 mths

62.8
62.8
0
0
819.5
0
882.3
362.7
85
447.7
1,330.00

62.8
62.8
0
0
991
0
1,053.80
559.3
179.6
738.9
1,792.70

68.2
68.2
0
0
1,164.60
0
1,232.80
636.7
183.2
819.9
2,052.70

68.2
68.2
0
0
1,553.90
0
1,622.10
554.2
39.9
594.1
2,216.20

102.4
102.4
0
0
1,987.50
0
2,089.90
531.7
32.3
564
2,653.90

1129.2
387.7
741.5
52.1
292.8
328.7
238.6
8.2
575.5
249.7
4.20
829.4
0
511.5
74.3
585.8
243.6
0
1330

1241
457.1
783.9
96.4
442.7
331
282.50
7.7
621.2
357
11.30
989.5
0
421.5
98.3
519.8
469.7
0
1,792.70

1358.5
521.6
836.9
117.3
595.40
349
381.90
9.9
740.8
274.1
15.70
1030.6
0
452.6
105.3
557.9
472.70
30.4
2,052.70

1556.7
606.3
950.4
142.9
598.90
380.8
400.80
7.6
789.2
395.9
20.60
1205.7
0
531.2
151.7
682.9
522.80
1.2
2,216.20

1732.5
695.9
1036.6
233.7
698.80
464.5
475.10
14.1
953.7
537.2
28.30
1519.2
0
654
180.4
834.4
684.80
0
2,653.90

63.3
70.24

73.4
83.89

523.7
90.32

530.6
118.84

122.4
102.07

Cadila Healthcare
Profit & Loss account
Mar '07
12 mths

------------------- in Rs. Cr. ------------------Mar '08

Mar '09
Mar '10
12 mths
12 mths
12 mths

Mar '11
12 mths

Income
Sales Turnover
Excise Duty
Net Sales
Other Income
Stock Adjustments
Total Income

1,538.20
87.9
1,450.30
68.7
72.8
1,591.80

1,758.20
76.4
1,681.80
118.2
-4
1,796.00

1,781.50
38.1
1,743.40
201.8
-18.7
1,926.50

1,908.00
22.4
1,885.60
538.6
11.2
2,435.40

2,213.70
34.6
2,179.10
806.9
34.6
3,020.60

Expenditure
Raw Materials
Power & Fuel Cost
Employee Cost
Other Manufacturing Expenses
Selling and Admin Expenses
Miscellaneous Expenses
Preoperative Exp Capitalised
Total Expenses

618.3
34.3
165.1
25.1
377.8
42.7
0
1,263.30

650.6
41.9
181.5
30
440.3
61.1
0
1,405.40

649.1
46.3
197.2
38.3
488.9
54.8
0
1,474.60

806.2
57.9
266.9
38.9
554
58.1
0
1,782.00

934.8
71.9
371.1
48.7
746.1
74.4
0
2,247.00

259.8
328.5
29.9
298.6
66.7
0
231.9
0
231.9
27.2
204.7
645
0
50.2
8.5

272.4
390.6
43.5
347.1
73.4
0
273.7
3.2
276.9
40.7
236.2
754.8
0
56.5
9.6

250.1
451.9
72.9
379
82.6
0
296.4
0
296.4
30.5
265.9
825.5
0
61.4
10.5

114.8
653.4
43.1
610.3
90
0
520.3
0
520.3
17
503.3
975.8
0
102.4
11.6

-33.3
773.6
39.5
734.1
96.9
0
637.2
10.6
647.8
37.4
610.4
1,312.20
0
128
14.6

1,256.14
16.3
80

1,256.14
18.8
90

1,364.99
19.48
90

1,364.99
36.87
100

2,047.49
29.81
125

Operating Profit
PBDIT
Interest
PBDT
Depreciation
Other Written Off
Profit Before Tax
Extra-ordinary items
PBT (Post Extra-ord Items)
Tax
Reported Net Profit
Total Value Addition
Preference Dividend
Equity Dividend
Corporate Dividend Tax
Per share data (annualised)
Shares in issue (lakhs)
Earning Per Share (Rs)
Equity Dividend (%)

Book Value (Rs)

70.24

83.89

90.32

118.84

102.07

Cadila Healthcare
Cash Flow
Mar '07
12 mths
Net Profit Before Tax
Net Cash From Operating Activities
Net Cash (used in)/from Investing Activities
Net Cash (used in)/from Financing Activities
Net (decrease)/increase In Cash and Cash Equivalents
Opening Cash & Cash Equivalents
Closing Cash & Cash Equivalents

231.9
210.6
-171.1
-29.4
10.1
2.3
12.4

------------------- in Rs. Cr. ------------------Mar '08

Mar '09
12 mths
12 mths
278.5
41.5
-267.4
232.5
6.6
12.4
19

296.4
268.1
-261.1
5.9
12.9
12.7
25.6

in Rs. Cr. ------------------Mar '10

12 mths

Mar '11
12 mths

520.3
513.5
-213.2
-297.7
2.6
25.6
28.2

637.2
549.4
-357.5
-177.7
14.2
28.2
42.4

Cadila Healthcare
Key Financial Ratios
Mar '07

------------------- in Rs. Cr. ------------------Mar '08

Mar '09
Mar '10

Investment Valuation Ratios

Face Value
5
5
Dividend Per Share
4
4.5
Operating Profit Per Share (Rs)
20.68
21.69
Net Operating Profit Per Share (Rs)
115.46
133.89
Free Reserves Per Share (Rs)
64.79
78.61
Bonus in Equity Capital
61.85
61.85
Profitability Ratios
Operating Profit Margin(%)
17.91
16.19
Profit Before Interest And Tax Margin(%)
12.66
11.09
Gross Profit Margin(%)
20.23
11.83
Cash Profit Margin(%)
17.79
16.7
Adjusted Cash Margin(%)
18.19
16.7
Net Profit Margin(%)
13.42
13.17
Adjusted Net Profit Margin(%)
13.82
13.17
Return On Capital Employed(%)
20.14
17.31
Return On Net Worth(%)
23.2
22.41
Adjusted Return on Net Worth(%)
23.89
21.46
Return on Assets Excluding Revaluations
70.24
83.89
Return on Assets Including Revaluations
70.24
83.89
Return on Long Term Funds(%)
22.43
20.8
Liquidity And Solvency Ratios
Current Ratio
1.02
1
Quick Ratio
0.82
1.23
Debt Equity Ratio
0.51
0.7
Long Term Debt Equity Ratio
0.35
0.42
Debt Coverage Ratios
Interest Cover
10.3
7.96
Total Debt to Owners Fund
0.51
0.7
Financial Charges Coverage Ratio
11.19
8.82
Financial Charges Coverage Ratio Post Tax 10.08
8.12
Management Efficiency Ratios
Inventory Turnover Ratio
4.64
5.78
Debtors Turnover Ratio
6.85
6.45
Investments Turnover Ratio
5.02
5.78
Fixed Assets Turnover Ratio
2.54
1.62
Total Assets Turnover Ratio
1.29
1.06
Asset Turnover Ratio
1.56
1.62

Mar '11

5
4.5
18.32
127.72
68.44
56.95

5
5
8.41
138.14
98.37
56.95

5
6.25
-1.63
106.43
86.33
71.26

14.34
8.38
9.6
20.05
20.05
13.31
13.31
20.52
22.11
26.43
88.09
88.09
24.66

6.08
1
1.31
25.81
25.81
20.39
20.39
27.39
31.05
33.75
118.75
118.75
28.52

-1.52
-4.38
-5.97
22.82
22.82
20.57
20.57
24.75
29.2
27.75
102.07
102.07
25.22

0.93
1.16
0.67
0.39

1.4
1.16
0.37
0.31

1.63
1.23
0.27
0.25

6.54
0.67
6.91
5.78

16.02
0.37
16.18
14.77

19.21
0.27
19.08
18.91

5.76
5.25
5.76
1.51
0.94
1.51

5.48
4.82
5.48
1.4
0.94
1.4

5.17
4.98
5.17
1.42
0.89
1.42

Average Raw Material Holding

Average Finished Goods Held
Number of Days In Working Capital

97.79
92.69
41.7
37.38
60.47
100.54
Profit & Loss Account Ratios
Material Cost Composition
42.63
38.68
Imported Composition of Raw Materials Consumed
36.81
33.08
Selling Distribution Cost Composition
12.45
12.46
Expenses as Composition of Total Sales
21.35
26.03
Cash Flow Indicator Ratios
Dividend Payout Ratio Net Profit
28.67
27.98
Dividend Payout Ratio Cash Profit
21.62
21.35
Earning Retention Ratio
72.16
70.78
Cash Earning Retention Ratio
78.85
77.94
AdjustedCash Flow Times
1.61
2.47
Earnings Per Share
Book Value

16.3
70.24

18.8
83.89

107.03
34.68
97.61

92.87
30.46
99.81

131.55
29.04
113.13

37.23
26.52
13.76
42.13

42.75
25.32
14.48
54.81

42.89
28.54
16.62
59.73

27.04
20.63
77.39
82.05
2.05

22.65
19.21
79.17
82.11
0.93

23.36
20.16
75.42
78.94
0.83

19.48
90.32

36.87
118.84

29.81
102.07

Monthly Stock Price Data from April 2

Cadila Healthcare
Year

Month

2006 April
May
June
July
August
September
October
November
December
2007 January
February
March
April
May
June
July
August
September
October
November
December
2008 January
February
March
April
May
June
July
August
September
October
November
December
2009 January
February
March
April
May
June
July
August

Open Price High Price

684.70
798.70
600.00
554.00
545.05
337.90
322.00
337.00
329.00
352.00
344.00
316.00
325.00
326.75
338.00
379.50
352.00
330.00
310.00
319.00
290.00
321.50
248.00
263.00
253.70
280.00
299.00
292.00
310.00
327.90
335.00
261.00
226.00
289.00
249.00
254.40
275.00
310.00
333.00
379.00
469.00

800.00
798.70
611.40
579.95
704.00
345.00
355.00
384.00
359.80
365.00
356.50
339.00
353.00
339.00
411.70
383.50
367.00
330.00
335.00
327.00
343.75
321.50
269.00
266.95
299.00
320.70
332.00
325.00
347.00
347.00
335.00
276.00
281.00
295.00
271.90
297.00
329.00
346.90
401.90
478.00
482.95

Low Price Close Price

609.55
559.00
461.00
512.65
329.00
303.55
312.30
320.00
300.10
335.00
297.00
292.00
315.15
307.00
326.00
326.00
298.10
298.00
285.00
285.00
285.00
202.50
240.00
209.00
243.00
280.00
274.00
286.90
305.00
301.00
245.00
222.00
223.10
233.05
248.00
237.55
271.50
282.10
318.00
335.00
417.05

781.70
579.25
568.35
559.90
337.10
322.15
344.35
323.80
351.45
336.65
320.05
335.50
322.75
335.80
376.30
351.40
305.85
310.95
316.80
287.25
314.70
247.30
260.80
254.65
288.65
295.50
297.35
312.45
322.10
310.10
258.05
225.60
267.60
246.40
254.40
272.10
307.10
332.80
378.80
463.35
455.00

Return

-25.90
-1.88
-1.49
-39.79
-4.43
6.89
-5.97
8.54
-4.21
-4.93
4.83
-3.80
4.04
12.06
-6.62
-12.96
1.67
1.88
-9.33
9.56
-21.42
5.46
-2.36
13.35
2.37
0.63
5.08
3.09
-3.73
-16.78
-12.58
18.62
-7.92
3.25
6.96
12.86
8.37
13.82
22.32
-1.80

No. of
Shares
381783
791937
139597
110731
261722
477217
612016
552202
463289
250535
181389
128345
304005
169014
999788
360251
285056
525006
975443
181930
564137
359370
170111
174190
157951
145343
207847
100683
106359
258193
78234
43356
174477
214294
50941
456428
216782
567111
560343
544194
744559

No. of
Trades
9620
8856
5679
3278
9537
5574
6270
11926
4638
3976
4248
3838
4919
4168
13080
5236
5427
6466
8110
5037
9470
6840
4034
3931
4049
4512
6319
2828
2600
2455
2359.00
1844.00
2419
5220
709.00
6392
5477
6547
7339
8920
8414

September
October
November
December
2010 January
February
March
April
May
June
July
August
September
October
November
December
2011 January
February
March

441.10
519.00
565.05
602.00
664.90
706.00
764.00
833.00
568.00
610.05
661.95
643.50
614.00
661.95
701.00
770.95
780.00
829.00
742.80

539.95
574.40
617.95
699.00
735.00
770.95
853.70
838.00
648.00
679.00
681.00
655.00
667.00
725.00
809.45
798.50
864.00
834.00
802.70

436.00
480.00
542.10
602.00
620.00
660.00
763.05
542.20
552.00
595.20
627.90
599.00
605.00
661.95
677.65
732.00
756.00
703.10
724.90

518.65
565.30
597.90
648.50
712.65
761.65
825.00
564.50
610.05
657.90
633.80
603.25
656.10
700.00
768.20
778.35
825.20
735.35
791.30

13.99
8.99
5.77
8.46
9.89
6.88
8.32
-31.58
8.07
7.84
-3.66
-4.82
8.76
6.69
9.74
1.32
6.02
-10.89
7.61

699760
193552
300780
459410
512090
304844
447124
643991
718555
401341
402438
933521
356125
571765
300387
115087
476014
190909
282767

10735
6028
5435
11299
14169
11360
12990
11457
12907
9825
12178
8336
10157
15330
8746
3799
12372
6918
7969

ock Price Data from April 2006 to March 2011

BSE 200 Index
Total Turnover
263709100.00
517045533.00
73730873.00
60899872.00
156863855.00
155932057.00
201501856.00
197342844.00
152940817.00
87696610.00
60087758.00
40517328.00
100518060.00
55549118.00
374074342.00
128840981.00
94282694.00
162273577.00
296856684.00
54313109.00
174822237.00
103637624.00
43717971.00
42543385.00
43451728.00
44144116.00
65345562.00
31016171.00
34793394.00
85921179.00
22666920.00
11110214.00
45441639.00
58275122.00
13267732.00
122017054.00
65700549.00
186936833.00
195278009.00
229539867.00
332819508.00

Open

High

Low

Close

1419.57
1507.07
1297.70
1272.80
1274.60
1399.37
1498.95
1564.30
1649.74
1655.28
1695.50
1551.10
1530.10
1680.30
1773.34
1809.90
1879.13
1865.69
2124.02
2470.89
2479.21
2664.67
2248.44
2178.64
1946.04
2187.32
2055.31
1647.70
1720.25
1767.25
1570.74
1187.12
1068.68
1163.67
1099.30
1030.46
1144.17
1370.29
1799.28
1771.78
1917.60

1502.34
1575.50
1312.83
1304.22
1414.20
1498.58
1575.33
1661.96
1684.99
1723.27
1760.70
1588.25
1712.66
1773.90
1805.67
1941.75
1897.77
2124.18
2460.72
2513.05
2666.59
2776.96
2371.08
2178.64
2183.34
2213.68
2059.91
1836.17
1899.61
1844.38
1592.41
1282.79
1209.43
1251.29
1140.71
1174.28
1362.94
1787.07
1894.44
1923.64
1952.79

1376.42
1201.33
1058.66
1167.13
1262.23
1376.39
1470.28
1560.13
1524.60
1603.20
1525.45
1461.85
1483.45
1638.80
1693.32
1806.68
1678.29
1860.53
2079.13
2273.15
2450.23
1904.07
2063.20
1819.94
1892.09
2014.01
1638.67
1532.03
1714.91
1474.96
921.75
991.75
997.91
1026.60
1018.46
955.60
1125.93
1370.29
1701.04
1606.61
1798.30

1500.48
1289.86
1271.02
1275.50
1398.68
1495.48
1560.68
1645.24
1655.74
1691.45
1545.27
1556.72
1666.14
1766.08
1804.81
1894.18
1857.70
2118.86
2439.87
2454.23
2656.52
2230.39
2217.47
1932.41
2157.52
2038.22
1644.18
1749.11
1782.08
1555.70
1145.68
1062.35
1156.59
1107.06
1044.94
1140.43
1339.38
1772.82
1767.09
1909.63
1930.45

Return

-14.04
-1.46
0.35
9.66
6.92
4.36
5.42
0.64
2.16
-8.64
0.74
7.03
6.00
2.19
4.95
-1.93
14.06
15.15
0.59
8.24
-16.04
-0.58
-12.86
11.65
-5.53
-19.33
6.38
1.88
-12.70
-26.36
-7.27
8.87
-4.28
-5.61
9.14
17.45
32.36
-0.32
8.07
1.09

Price/
Earnings
21.03
19.91
16.47
17.37
17.96
18.96
20.06
19.91
19.58
20.32
19.00
17.00
18.03
18.59
19.68
20.95
19.02
20.81
24.57
25.36
27.07
25.74
21.69
19.38
19.87
20.05
17.98
17.15
18.52
17.36
12.87
12.38
12.65
12.79
13.29
13.20
15.96
19.01
20.49
19.99
20.39

Price/
Bookvalue
4.55
4.43
3.57
3.65
3.81
3.93
4.06
4.29
4.31
4.53
4.57
4.18
4.41
4.45
4.50
4.75
4.46
4.71
5.58
5.93
6.36
6.15
5.38
4.81
4.90
4.91
4.23
3.35
3.53
3.31
2.46
2.17
2.22
2.23
2.18
2.14
2.58
3.02
3.46
3.37
3.54

344306514.00
105001556.00
173641833.00
301244110.00
354343711.00
222646226.00
360424657.00
370248185.00
421797703.00
251998755.00
262013388.00
591882857.00
225740626.00
400672561.00
228793775.00
88506999.00
376665818.00
148221125.00
217181194.00

1938.10
2100.46
1950.28
2117.60
2178.01
2053.93
2091.42
2210.53
2218.91
2147.54
2237.38
2297.17
2313.81
2541.63
2562.44
2453.00
2543.96
2279.03
2199.48

2096.38
2166.43
2146.97
2189.68
2242.47
2103.13
2224.31
2267.07
2224.56
2257.99
2319.47
2371.08
2557.24
2644.37
2671.95
2538.19
2557.05
2303.24
2391.35

1894.51
1957.68
1894.34
2081.14
2011.14
1990.25
2091.42
2175.22
2026.84
2099.94
2219.05
2283.12
2313.75
2512.75
2354.94
2366.71
2229.16
2122.78
2198.60

2094.94
1962.88
2105.51
2180.25
2065.21
2071.72
2199.50
2230.17
2152.21
2248.06
2281.63
2302.88
2530.47
2541.85
2451.45
2533.90
2270.22
2185.86
2378.69

8.52
-6.30
7.27
3.55
-5.28
0.32
6.17
1.39
-3.50
4.45
1.49
0.93
9.88
0.45
-3.56
3.36
-10.41
-3.72
8.82

21.54
21.93
20.57
21.27
21.79
19.69
20.36
20.75
19.60
20.36
21.21
22.18
23.38
24.36
21.99
20.78
20.02
18.05
18.28

3.75
3.87
3.87
4.01
4.10
3.76
3.90
3.99
3.75
3.47
3.51
3.58
3.77
3.93
3.84
3.73
3.61
3.36
3.42

Dividend
Yield
1.27
1.34
1.60
1.56
1.48
1.41
1.33
1.26
1.25
1.18
1.17
1.28
1.20
1.12
1.05
0.98
1.05
1.01
0.89
0.84
0.78
0.82
0.93
1.04
1.00
0.97
1.07
1.22
1.15
1.23
1.67
1.86
1.82
1.81
1.86
1.89
1.62
1.38
1.17
1.19
1.13

1.06
1.04
1.04
1.00
0.97
1.03
0.98
0.94
0.97
1.01
0.99
0.97
0.92
0.88
0.90
0.92
0.96
1.02
1.01

Descriptive Statistics
Cadila Healthcare Stock Price (m)
Mean
0.77
Standard Error
1.51
Median
3.25
Mode
#N/A
Standard Deviation
11.59
Sample Variance
134.31
Kurtosis
2.40
Skewness
-1.29
Range
62.11
Minimum
-39.79
Maximum
22.32
Sum
45.15
Count
59

Year
2007
2008
2009
2010
2011

BSE 200 Index (n)

Mean
1.22
Standard Error
1.23
Median
1.39
Mode
#N/A
Standard Deviation
9.42
Sample Variance
88.68
Kurtosis
2.05
Skewness
-0.08
Range
58.72
Minimum
-26.36
Maximum
32.36
Sum
72.25
Count
59

Cost of Debt
Interest Paid
Total Debt
Rates
447.70
29.90
738.90
43.50
819.90
72.90
594.10
43.10
564.00
39.50

6.68
5.89
8.89
7.25
7.00

Avg Kd

7.14

Weighted Average Cost of Capital (WACC)

Value
Cost
Common Equity
2,089.90
Debt
564.00
Prefered Stock
0
Total
2,653.90

3.97
7.00
0
4.10

Calculation of Market Return

Rm
-1.78
Rf*
8.50
* Return on Fixed Deposits
Tax Rate

Calculation of Beta
value = Cov(Rn,Rm)/m2
Cov(Rn,Rm)
39.04
m2
88.68
value
0.44

35%
Cost of Equity (CAPM)
Ke = Rf + value * (Rm-Rf)
Ke
3.97

Unlevered Beta
= u *1+(1-T)D/E+*
*Hamda's Equation

D/E
u

Unlevered Beta

= u *1+(1-T)D/E+*
mda's Equation
0.44
0.27
0.37

Debt/Asset
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
0.09
0.10
0.11
0.12
0.13
0.14
0.15
0.16
0.17
0.18
0.19
0.20
0.21
0.22
0.23
0.24
0.25
0.26
0.27
0.28
0.29
0.30
0.31
0.32
0.33
0.34
0.35
0.36
0.37
0.38
0.39
0.40
0.41
0.42
0.43
0.44

D/E

0.01
0.02
0.03
0.04
0.05
0.06
0.08
0.09
0.10
0.11
0.12
0.14
0.15
0.16
0.18
0.19
0.20
0.22
0.23
0.25
0.27
0.28
0.30
0.32
0.33
0.35
0.37
0.39
0.41
0.43
0.45
0.47
0.49
0.52
0.54
0.56
0.59
0.61
0.64
0.67
0.69
0.72
0.75
0.79

0.38
0.38
0.38
0.38
0.39
0.39
0.39
0.40
0.40
0.40
0.40
0.41
0.41
0.41
0.42
0.42
0.42
0.43
0.43
0.44
0.44
0.44
0.45
0.45
0.46
0.46
0.46
0.47
0.47
0.48
0.48
0.49
0.49
0.50
0.51
0.51
0.52
0.52
0.53
0.54
0.54
0.55
0.56
0.57

Kd(1-T)
3.00
3.01
3.02
3.03
3.05
3.06
3.07
3.08
3.09
3.10
3.12
3.13
3.14
3.15
3.16
3.18
3.19
3.20
3.21
3.22
3.24
3.25
3.26
3.27
3.29
3.30
3.31
3.32
3.34
3.35
3.36
3.37
3.39
3.40
3.41
3.43
3.44
3.45
3.47
3.48
3.49
3.50
3.52
3.53

Ke = Rf + WACC = (D/A)Kd +
(Rm-Rf)
(1 - D/A) Ke
4.62
4.61
4.60
4.57
4.57
4.52
4.54
4.48
4.52
4.44
4.49
4.40
4.46
4.36
4.43
4.32
4.40
4.28
4.37
4.24
4.34
4.20
4.31
4.17
4.27
4.13
4.24
4.09
4.21
4.05
4.17
4.01
4.14
3.97
4.10
3.94
4.06
3.90
4.02
3.86
3.98
3.83
3.94
3.79
3.90
3.75
3.86
3.72
3.81
3.68
3.77
3.65
3.72
3.61
3.67
3.58
3.63
3.54
3.58
3.51
3.52
3.47
3.47
3.44
3.41
3.41
3.36
3.37
3.30
3.34
3.24
3.31
3.18
3.27
3.11
3.24
3.05
3.21
2.98
3.18
2.91
3.15
2.84
3.12
2.76
3.09
2.68
3.06

0.45
0.46
0.47
0.48
0.49
0.50
0.51
0.52
0.53
0.54
0.55
0.56
0.57
0.58
0.59
0.60
0.61
0.62
0.63
0.64
0.65
0.66
0.67
0.68
0.69
0.70
0.71
0.72
0.73
0.74
0.75
0.76
0.77
0.78
0.79
0.80
0.81
0.82
0.83
0.84
0.85
0.86
0.87
0.88
0.89
0.90
0.91

0.82
0.85
0.89
0.92
0.96
1.00
1.04
1.08
1.13
1.17
1.22
1.27
1.33
1.38
1.44
1.50
1.56
1.63
1.70
1.78
1.86
1.94
2.03
2.13
2.23
2.33
2.45
2.57
2.70
2.85
3.00
3.17
3.35
3.55
3.76
4.00
4.26
4.56
4.88
5.25
5.67
6.14
6.69
7.33
8.09
9.00
10.11

0.57
0.58
0.59
0.60
0.61
0.62
0.63
0.64
0.65
0.66
0.67
0.68
0.70
0.71
0.72
0.74
0.76
0.77
0.79
0.81
0.83
0.85
0.87
0.89
0.92
0.94
0.97
1.00
1.03
1.07
1.11
1.15
1.19
1.24
1.29
1.35
1.41
1.48
1.56
1.65
1.75
1.87
2.00
2.16
2.34
2.57
2.84

3.54
3.56
3.57
3.59
3.60
3.67
3.74
3.82
3.90
3.97
4.05
4.13
4.22
4.30
4.39
4.47
4.56
4.66
4.75
4.84
4.94
5.04
5.14
5.24
5.35
5.45
5.56
5.68
5.79
5.90
6.02
6.14
6.27
6.39
6.52
6.65
6.78
6.92
7.06
7.20
7.34
7.49
7.64
7.79
7.95
8.11
8.27

2.60
2.52
2.43
2.34
2.24
2.14
2.04
1.94
1.82
1.71
1.59
1.46
1.33
1.19
1.05
0.89
0.73
0.56
0.39
0.20
0.00
-0.21
-0.44
-0.67
-0.92
-1.19
-1.48
-1.79
-2.12
-2.48
-2.86
-3.28
-3.73
-4.23
-4.77
-5.37
-6.03
-6.76
-7.58
-8.50
-9.54
-10.73
-12.11
-13.71
-15.61
-17.89
-20.67

3.02
3.00
2.97
2.94
2.91
2.91
2.91
2.92
2.92
2.93
2.94
2.96
2.98
2.99
3.02
3.04
3.07
3.10
3.13
3.17
3.21
3.25
3.30
3.35
3.40
3.46
3.52
3.59
3.65
3.73
3.80
3.88
3.97
4.05
4.15
4.25
4.35
4.46
4.57
4.69
4.81
4.94
5.07
5.21
5.36
5.51
5.66

0.92
0.93
0.94
0.95
0.96
0.97
0.98
0.99

11.50
13.29
15.67
19.00
24.00
32.33
49.00
99.00

3.17
3.61
4.19
5.00
6.22
8.25
12.31
24.48

8.43
8.60
8.77
8.95
9.13
9.31
9.50
9.69

-24.14
-28.62
-34.58
-42.92
-55.44
-76.31
-118.03
-243.22

5.83
6.00
6.17
6.36
6.55
6.74
6.95
7.16

Optimal Capital Structure

Debt/Asset
0.49
0.5
WACC (min)
2.91
2.91

0.51
2.91

Assumption: Kd increases slowly till D/E ratio is 0.5 and increases rapidly after that.
Conclusion: We find optimal capital structure to be in a range from 0.49 to 0.51 Debt/Asset.