prepare a dcf analysis on amdmiddot ultimate goal

Question

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

β_u = β_l / {1 + [(1 - t)D/E]}

K_eu = r_f + β_u(r_m - r_f)

K_el = r_f + β_l(r_m - r_f)

WACC = D/D+E(1-t)Kd + E/D+E_kel