Discounted Cash Flow (DCF) Analysis Levered

Apollo Commercial Real Estate Finan... (ARI)

$11.94

-0.14 (-1.16%)

All numbers are in Millions, Currency in USD

Stock DCF: 15.42 | 11.94 | undervalue

Free Cash Flow

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	255.20	299.45	315	210.58	278.32	293.31	309.11	325.76	343.32	361.81
Revenue (%)
Operating Cash Flow	154.87	265.96	273.43	164.05	199.38	226.35	238.54	251.39	264.94	279.21
Operating Cash Flow (%)
Capital Expenditure	-	-	-	-	-0.13	-0.14	-0.15	-0.16	-0.16	-0.17
Capital Expenditure (%)
Free Cash Flow	154.87	265.96	273.43	164.05	199.25	226.21	238.39	251.24	264.77	279.04

Weighted Average Cost Of Capital

Share price	$ 11.94
Beta	1.275
Diluted Shares Outstanding	148
Cost of Debt
Tax Rate	0.00
After-tax Cost of Debt	8.07%
Risk-Free Rate
Market Risk Premium
Cost of Equity	8.807
Total Debt	2,013.29
Total Equity	1,767.17
Total Capital	3,780.47
Debt Weighting	53.26
Equity Weighting	46.74
Wacc

Build Up Free Cash Flow

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	255.20	299.45	315	210.58	278.32	293.31	309.11	325.76	343.32	361.81
Operating Cash Flow	154.87	265.96	273.43	164.05	199.38	226.35	238.54	251.39	264.94	279.21
Capital Expenditure	-	-	-	-	-0.13	-0.14	-0.15	-0.16	-0.16	-0.17
Free Cash Flow	154.87	265.96	273.43	164.05	199.25	226.21	238.39	251.24	264.77	279.04
WACC
PV LFCF						208.66	202.84	197.19	191.69	186.34
SUM PV LFCF										986.72

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	8.41
Free cash flow (t + 1)	284.62
Terminal Value	4,440.23
Present Value of Terminal Value	2,965.24

Intrinsic Value

Enterprise Value	3,951.96
Net Debt	1,670.19
Equity Value	2,281.77
Shares Outstanding	148
Equity Value Per Share	15.42