Bankerboy30
New member
- Jun 18, 2026
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Guys,
I need some help in trying to reconcile two approaches to calculate the price per share of a stock. Lets say I have the following information. My balance sheet consists of $100 of debt and $100 of equity along with $200 of PPE. My cost of debt is 3% and my cost of equity is 8%. The tax rate of the business 30%. My TVGR is 2.5%. My shares outstanding are 10. I want to calculate the equity value per share using FCFE and FCFF - Debt and arrive at a comparable value. Can you tell me where I’m going wrong in my calculation.
FCFF:
EBIT Year 1 = 50M
Taxes = 15M (50 * .3)
NOPAT = 35
EV using TVGR = (35/(.051-.025)) = 1,373 - .051 is WACC
FCFE = 1,373-100 = 1,273
Share price = 1,273 / 10 = 127
Approach 2
FCFE
EBIT Year 1: 50
Interest: 3 (.03 * 100)
Taxes: (50-3)*.3 = 14
Net income: 50-3-14 = 33
NPV: 33/(.08-.025)=598
Equity value per share = 598/10 = 60
I need some help in trying to reconcile two approaches to calculate the price per share of a stock. Lets say I have the following information. My balance sheet consists of $100 of debt and $100 of equity along with $200 of PPE. My cost of debt is 3% and my cost of equity is 8%. The tax rate of the business 30%. My TVGR is 2.5%. My shares outstanding are 10. I want to calculate the equity value per share using FCFE and FCFF - Debt and arrive at a comparable value. Can you tell me where I’m going wrong in my calculation.
FCFF:
EBIT Year 1 = 50M
Taxes = 15M (50 * .3)
NOPAT = 35
EV using TVGR = (35/(.051-.025)) = 1,373 - .051 is WACC
FCFE = 1,373-100 = 1,273
Share price = 1,273 / 10 = 127
Approach 2
FCFE
EBIT Year 1: 50
Interest: 3 (.03 * 100)
Taxes: (50-3)*.3 = 14
Net income: 50-3-14 = 33
NPV: 33/(.08-.025)=598
Equity value per share = 598/10 = 60