CAPM,WACC,DCF & Multiples
Weighted Average Cost of Capital(1/2)
Cost Of Equity (CAPM)Beta 0.67 Google Finance
Risk Free Rate 3.45% Yield Rates US Treasury Bond 10-Years
Market Return 7.66% Yearly Average 1966-2010Market Premium 4.04%
Cost of Equity 6.27%
Cost of DebtType Due date Rate Amount (in thousands)
Senior Notes 2014 2.170% 517,269
Debentures 2027 0.0588 148,923.7
Debentures 2097 7.45% 139,473
Primary Notes 2015 0.0732 14,370
St Borrowings 8.80% 22,674
Total Debt
842,709.9
Cost Of Debt 3.97%
Cost Of CapitalShares Outstanding 109,436,869
Market Price 81.12
Value of Equity ($K) 8,877,518.81
Value of Debt($K) 842,709.90
Enterprise Value($K) 9,720,228.708
Taxes 32%
Weighted Average Cost of Capital(2/2)
Weighted Average Cost Of Capital 5.96%
Discounted Cash Flow Analysis
Discounted Cash Flow Analysis(in Thousands)
2010 2011 2012 2013 2014Operating Cash 418,983 742,989 690,041 697,647 732,435
Capital Expenditure(-) -125,170 -112,288 -117,485 -122,922 -128,612
Dividend (-) -157,589 -170,183 -187,276 -195,371 -203,790
Future Cash Flow 136,224 460,518 385,279 379,354 400,034
Projection Year 1 2 3 4 5
Discount [email protected]% 0.944 0.891 0.841 0.793 0.749
PV of Free Cash Flow 128,561.7 410,168.9 323,854.2 300,937.9 299,493.3
Terminal Value AssumptionsTerminal Cash Flow 400,034
Terminal Growth Rate 2.40%Terminal Value 11,506,596
Projection Year 5Discount [email protected]% 0.749
PV of Terminal Value 8,614,639.6
Implied Equity Value & Share PricePV of Free Cash Flow 1,463,016.0
PV of Terminal Value 8,614,639.6
Enterprise Value 10,077,655Outstanding Shares 109,436,869
Net Debt 842,709.900
Implied Equity Value 9,234,945.7Implied Share Value 84.39
Valuation using MultiplesMultiples of Competitors
PPG Industries Nippon Paints Valspar Corporation
Trailing P/E Ratio 18.88 18.12 17.34Price/Sales 1.03 0.73 1.07Price/Book 3.79 1.27 2.31EV/EBITDA 8.79 15.48 9.85
Valuation of Sherwin Williams
PPG Industries Nippon Paints Valspar Corporation
Trailing P/E Ratio 8731.62 8379.38 8019.40Price/Sales 8013.40 5681.82 8324.60Price/Book 6101.85 2044.68 3719.07EV/EBITDA 7991.25 14073.33 8954.93
Market Leader