Inputs Enter your Enter your Enter your Enter your

after-tax operating earnings (EBIT (1-t)) in your terminal year = free cashflow to firm in your terminal year = perpetual growth rate= cost of capital in perpetuity =

1035 750 4% 9.35%

Output Your reinvestment rate in perpetuity is = Your return on capital (equity) in perpetuity has to be = Just for your edification If your return on capital = cost of capital, your reinvestment rate would be

27.54% 14.53%

42.78%

! If you are doing an equity valuation, enter the net income ! If you are doing an equity valuation, enter the FCFE ! If you are doing an equity valuation, enter the cost of equity

! With equity valuation, return on equity = cost of equity