Discounted Cash Flow (DCF) Analysis Levered

Mercantile Bank Corporation (MBWM)

$31.67

+0.89 (+2.89%)
All numbers are in Millions, Currency in USD
Stock DCF: 144.08 | 31.67 | 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 128.75139.09151.49167.42179.22194.69211.49229.73249.56271.09
Revenue (%)
Operating Cash Flow 38.6661.7444.7737.8864.5763.3268.7874.7281.1788.17
Operating Cash Flow (%)
Capital Expenditure -5.42-6.32-13.48-8.99-5.60-10.18-11.06-12.02-13.05-14.18
Capital Expenditure (%)
Free Cash Flow 33.2455.4231.2828.8958.9753.1457.7262.7068.1173.99

Weighted Average Cost Of Capital

Share price $ 31.67
Beta 1.012
Diluted Shares Outstanding 15.70
Cost of Debt
Tax Rate 19.93
After-tax Cost of Debt 3.14%
Risk-Free Rate
Market Risk Premium
Cost of Equity 8.376
Total Debt 495.89
Total Equity 497.11
Total Capital 993
Debt Weighting 49.94
Equity Weighting 50.06
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 128.75139.09151.49167.42179.22194.69211.49229.73249.56271.09
Operating Cash Flow 38.6661.7444.7737.8864.5763.3268.7874.7281.1788.17
Capital Expenditure -5.42-6.32-13.48-8.99-5.60-10.18-11.06-12.02-13.05-14.18
Free Cash Flow 33.2455.4231.2828.8958.9753.1457.7262.7068.1173.99
WACC
PV LFCF 50.2451.6153.0154.4455.92
SUM PV LFCF 265.22

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 5.76
Free cash flow (t + 1) 75.47
Terminal Value 2,007.22
Present Value of Terminal Value 1,517

Intrinsic Value

Enterprise Value 1,782.23
Net Debt -479.27
Equity Value 2,261.50
Shares Outstanding 15.70
Equity Value Per Share 144.08