Discounted Cash Flow (DCF) Analysis Levered

TransAlta Corporation (TA.TO)

$13.08

-0.01 (-0.11%)

All numbers are in Millions, Currency in USD

Stock DCF: 59.20 | 13.08 | undervalue

Free Cash Flow

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	2,249	2,347	2,101	2,721	2,976	3,219.71	3,483.39	3,768.65	4,077.28	4,411.18
Revenue (%)
Operating Cash Flow	820	849	702	1,001	877	1,109.54	1,200.40	1,298.71	1,405.07	1,520.13
Operating Cash Flow (%)
Capital Expenditure	-297	-431	-500	-489	-949	-677.61	-733.10	-793.13	-858.09	-928.36
Capital Expenditure (%)
Free Cash Flow	523	418	202	512	-72	431.93	467.31	505.58	546.98	591.77

Weighted Average Cost Of Capital

Share price	$ 13.08
Beta	1.122
Diluted Shares Outstanding	271
Cost of Debt
Tax Rate	85.84
After-tax Cost of Debt	1.01%
Risk-Free Rate
Market Risk Premium
Cost of Equity	8.935
Total Debt	3,669
Total Equity	3,544.68
Total Capital	7,213.68
Debt Weighting	50.86
Equity Weighting	49.14
Wacc

Build Up Free Cash Flow

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	2,249	2,347	2,101	2,721	2,976	3,219.71	3,483.39	3,768.65	4,077.28	4,411.18
Operating Cash Flow	820	849	702	1,001	877	1,109.54	1,200.40	1,298.71	1,405.07	1,520.13
Capital Expenditure	-297	-431	-500	-489	-949	-677.61	-733.10	-793.13	-858.09	-928.36
Free Cash Flow	523	418	202	512	-72	431.93	467.31	505.58	546.98	591.77
WACC
PV LFCF						411.76	424.67	437.99	451.72	465.88
SUM PV LFCF										2,192.02

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	4.90
Free cash flow (t + 1)	603.61
Terminal Value	20,814.10
Present Value of Terminal Value	16,386.27

Intrinsic Value

Enterprise Value	18,578.29
Net Debt	2,535
Equity Value	16,043.29
Shares Outstanding	271
Equity Value Per Share	59.20