Prepare a DCF analysis on AMD· Ultimate goal is for to determine a range of implied AMD share price you believe is related - DCF starting from 2008 to 2020· When showing your homework, we will probe: o Why you select some assumptions on financials o Why you choose some assumptions on WACC / terminal value growth o Why you select some assumptions in creating the sensitivity tables
1. Why you select some assumptions on financials
2. Why you select some assumptions on WACC /terminal value growth
3. Why you select some assumptions in creating the sensitivity tables
| Actual |
|
Broker consensus |
|
ATIC estimates |
| 2008A |
2009A |
2010A |
2011E |
2012E |
2013E |
2014E |
2015E |
2016E |
2017E |
2018E |
2019E |
2020E |
| Revenue |
|
|
|
|
|
| % growth |
|
|
|
|
|
| EBITDA |
|
|
|
|
|
| % growth |
|
|
|
|
|
| % margin |
|
|
|
|
|
| D & A |
|
|
|
|
|
| % capex |
|
|
|
|
|
| EBIT |
|
|
|
|
|
| % margin |
|
|
|
|
|
| NOPLAT tax |
|
|
|
|
|
| Tax rate % |
|
|
|
|
|
|
|
|
|
|
| NOPLAT |
|
|
|
|
|
| % margin |
|
|
|
|
|
|
|
|
|
|
|
| D & A (add back) |
|
|
|
|
| Capex |
|
|
|
|
|
| % revenue |
|
|
|
|
| Change in WC |
|
|
|
|
| % revenue |
|
|
|
|
| |
|
|
|
|
|
| Free Cash Flow |
|
|
|
|
| % growth |
|
|
|
|
|
| % margin |
|
|
|
|
|
| Cash conversion (FCF/EBITDA) |
|
|
|
|
|
|
Terminal growth |
|
|
EBITDA exit multiple |
|
#DIV/0! |
|
|
|
|
|
|
0 |
|
|
|
|
|
|
|
#DIV/0! |
#DIV/0! |
#DIV/0! |
#DIV/0! |
#DIV/0! |
|
0.0% |
0 |
0 |
0 |
0 |
0 |
|
|
#DIV/0! |
#DIV/0! |
#DIV/0! |
#DIV/0! |
#DIV/0! |
|
0.0% |
0 |
0 |
0 |
0 |
0 |
| WACC |
|
#DIV/0! |
#DIV/0! |
#DIV/0! |
#DIV/0! |
#DIV/0! |
WACC |
0.0% |
0 |
0 |
0 |
0 |
0 |
|
|
#DIV/0! |
#DIV/0! |
#DIV/0! |
#DIV/0! |
#DIV/0! |
|
0.0% |
0 |
0 |
0 |
0 |
0 |
|
|
#DIV/0! |
#DIV/0! |
#DIV/0! |
#DIV/0! |
#DIV/0! |
|
0.0% |
0 |
0 |
0 |
0 |
0 |
| WACC Assumptions & Calculation |
|
| WACC (public company) |
|
| Cost of Equity (Ke) |
|
|
| Risk free rate (rf) |
|
|
| Beta |
|
|
|
| Market risk premium (rm-rf) |
|
| MV of Equity |
|
|
| Equity/Total Capital |
|
|
| Net cost of debt |
|
|
| Risk free rate (rf) |
|
|
| Debt premium |
|
|
| Gross cost of debt |
|
|
| Tax rate |
|
|
|
| BV of Debt/(Cash) |
|
|
| Debt/Total Capital |
|
|
| MV of Total Capital |
|
|
WACC = Weighted Average Cost of Capital
βu = βl / {1 + [(1 - t)D/E]}
Keu = rf + βu(rm - rf)
Kel = rf + βl(rm - rf)
WACC = D/D+E(1-t)Kd + E/D+Ekel