Discounted Cash Flow (DCF) Analysis Levered

Domtar Corp (UFS)

$ 55.42
8.04 (+16.97%)

Free Cash Flow

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Projected
2022
Projected
2023
Projected
2024
Projected
2025
Projected
Revenue 5,3915,5635,2645,0985,1575,4555,2203,6523,481.153,318.293,163.053,015.072,874.02
Revenue (%)
Operating Cash Flow 411634453465449554442411327.80312.46297.85283.91270.63
Operating Cash Flow (%)
Capital Expenditure -242-236-289-347-182-195-255-175-164.52-156.83-149.49-142.50-135.83
Capital Expenditure (%)
Free Cash Flow 169398164118267359187236163.28155.64148.36141.42134.80

Weighted Average Cost Of Capital

Share price $ 55.42
Beta 1.916
Diluted Shares Outstanding 55
Cost of Debt
Tax Rate 41.74
After-tax Cost of Debt 2.91%
Risk-Free Rate
Market Risk Premium
Cost of Equity 17.712
Total Debt 1,087
Total Equity 3,048.10
Total Capital 4,135.10
Debt Weighting 26.29
Equity Weighting 73.71
Wacc

Build Up Free Cash Flow

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Projected
2022
Projected
2023
Projected
2024
Projected
2025
Projected
Revenue 5,3915,5635,2645,0985,1575,4555,2203,6523,481.153,318.293,163.053,015.072,874.02
Operating Cash Flow 411634453465449554442411327.80312.46297.85283.91270.63
Capital Expenditure -242-236-289-347-182-195-255-175-164.52-156.83-149.49-142.50-135.83
Free Cash Flow 169398164118267359187236163.28155.64148.36141.42134.80
WACC
PV LFCF 143.45120.14100.6184.2670.57
SUM PV LFCF 519.03

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 13.82
Free cash flow (t + 1) 140.19
Terminal Value 1,427.62
Present Value of Terminal Value 747.34

Intrinsic Value

Enterprise Value 1,266.37
Net Debt 778
Equity Value 488.37
Shares Outstanding 55
Equity Value Per Share 8.88