EBIT
- Theoretical tax on all EBIT
- Net increase in fixed assets
- Net increase in working capital
= Free cash flow
WACC:
Cost of Equity = Risk free rate + relevered beta * equity risk premium.
WACC =
Cost of debt * (1 - tax rate) * weight of debt in total capital + cost of equity * weight of equity in total capital
Terminal value:
Perpetual growth: Terminal year FCF/ (cost of capital - growth)