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WSP Levered DCF Model VF

This document provides a template for a levered discounted cash flow model. It includes sections for revenue projections with 4% annual growth, net income calculations at a 20% margin, additions for depreciation and amortization and subtractions for capital expenditures and changes in net working capital. It then calculates free cash flow to equity for 5 years and assigns discount rates to calculate the present value of those cash flows. It provides two methods to calculate a terminal value and implied equity value - using a perpetuity growth model and an exit multiple, resulting in an implied share price around $41.

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217 views5 pages

WSP Levered DCF Model VF

This document provides a template for a levered discounted cash flow model. It includes sections for revenue projections with 4% annual growth, net income calculations at a 20% margin, additions for depreciation and amortization and subtractions for capital expenditures and changes in net working capital. It then calculates free cash flow to equity for 5 years and assigns discount rates to calculate the present value of those cash flows. It provides two methods to calculate a terminal value and implied equity value - using a perpetuity growth model and an exit multiple, resulting in an implied share price around $41.

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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Levered DCF Model Template

Further Reading → Levered DCF Model

Disclaimer: The enclosed model is proprietary to Wall Street Prep and designed for illustrative and
training purposes only. For more information about our online self-study course offerings and training
programs, contact us at 800-646-3575 or visit us online at wallstreetprep.com.

© 2022 Wall Street Prep, Inc. All Rights Reserved


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Template Library
Levered DCF Model
($ in millions) Year 0 Year 1 Year 2 Year 3

Revenue $100 $104 $108 $112


% Growth 4.0% 4.0% 4.0%
Net Income $20 $24 $29 $35
% Net Margin 20.0% 20.0% 20.0% 20.0%
Plus: D&A Capex 85.0% 4 4 5 5
Less: Capex % Revenue 5.0% (5) (5) (5) (6)
Less: Change in NWC % Revenue 1.0% 1 1 1 1
Less: Mandatory Debt Repayment (2) (2) (2) (2)
Free Cash Flow to Equity (FCFE) $18 $22 $27 $33
Discount Period Cost of Equity 12.5% 0.5 1.5 2.5
Present Value of FCFE $21 $23 $24

DCF Valuation – Perpetuity Growth


Present Value of FCFEs $123
Long-Term Growth Rate 2.5%
Final Year FCF × (1 + g) $49
Terminal Value in Final Year $493
Present Value of Terminal Value $290
Equity Value $413
Diluted Shares Outstanding (mm) 10
Implied Share Price $41.28

DCF Valuation – Exit Multiple


Present Value of FCFEs $123
Exit P/E Multiple 10.0x
Terminal Value in Final Year $498
Present Value of Terminal Value $293
Equity Value $416
Diluted Shares Outstanding (mm) 10
Implied Share Price $41.57
Year 4 Year 5

$117 $122
4.0% 4.0%
$41 $50
20.0% 20.0%
5 5
(6) (6)
1 1
(2) (2)
$40 $48
3.5 4.5
$26 $28

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