Discounted Cash Flow (DCF) Analysis Levered

TransAlta Corporation (TA.TO)

$12.97

+0.25 (+1.97%)
All numbers are in Millions, Currency in USD
Stock DCF: 22.18 | 12.97 | 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 2,3072,2492,3472,1012,7212,862.983,012.373,169.553,334.943,508.95
Revenue (%)
Operating Cash Flow 6268208497021,001973.241,024.021,077.461,133.681,192.83
Operating Cash Flow (%)
Capital Expenditure -389-297-431-500-489-516.49-543.44-571.79-601.63-633.02
Capital Expenditure (%)
Free Cash Flow 237523418202512456.75480.59505.66532.05559.81

Weighted Average Cost Of Capital

Share price $ 12.97
Beta 1.083
Diluted Shares Outstanding 271
Cost of Debt
Tax Rate -41.32
After-tax Cost of Debt 7.56%
Risk-Free Rate
Market Risk Premium
Cost of Equity 8.631
Total Debt 3,267
Total Equity 3,514.87
Total Capital 6,781.87
Debt Weighting 48.17
Equity Weighting 51.83
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 2,3072,2492,3472,1012,7212,862.983,012.373,169.553,334.943,508.95
Operating Cash Flow 6268208497021,001973.241,024.021,077.461,133.681,192.83
Capital Expenditure -389-297-431-500-489-516.49-543.44-571.79-601.63-633.02
Free Cash Flow 237523418202512456.75480.59505.66532.05559.81
WACC
PV LFCF 390.80380.34370.17360.26350.63
SUM PV LFCF 2,002.41

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 8.11
Free cash flow (t + 1) 571.01
Terminal Value 9,345.44
Present Value of Terminal Value 6,328.06

Intrinsic Value

Enterprise Value 8,330.47
Net Debt 2,320
Equity Value 6,010.47
Shares Outstanding 271
Equity Value Per Share 22.18