Marks and Spencer

Valuation

Computation of WACC

WACC = 0,060*(1-0,33)*0,20 + 0,0952*(1-0,2) = %8,42

Estimation of Cash Flows-10 years

YearsRevenues Opr.

MarginEBIT EBIT(1-t) Net Cap.

Exp.Change in WC

FCFF

Current 8.196 6,73% 552 370 186 1 8.606 7,21% 620 416 195 97 123 2 9.036 7,68% 694 465 205 102 158 3 9.488 8,16% 774 519 215 107 196 4 9.962 8,64% 861 577 226 113 238 5 10.460 9,12% 953 639 237 118 283 6 10.983 9,59% 1.054 706 249 124 332 7 11.533 10,07% 1.161 778 262 131 386 8 12.109 10,55% 1.277 856 275 137 444 9 12.715 11,02% 1.402 939 289 144 507

10 13.350 11,50% 1.535 1.029 303 151 575 After 10 14.018 11,50% 1.612 1.080

Estimation of Cash Flows-After 10 years

Reinvestment Rate= g/ROC33,33%

Terminal Value = EBIT*(1-t)*(1-R) / (WACC-g)

21.054

Discounted Cash Flows

Years FCFF 1+WACCDiscount Factor

Disc. Cash Flows

1 123 1,0842 0,92 113 2 158 1,0842 0,85 134 3 196 1,0842 0,78 154 4 238 1,0842 0,72 172 5 283 1,0842 0,67 189 6 332 1,0842 0,62 205 7 386 1,0842 0,57 219 8 444 1,0842 0,52 232 9 507 1,0842 0,48 245

10 575 1,0842 0,45 256 After 10 21.054 1,0842 0,45 9.381 Total 11.300

Value of EquityYears FCFF 1+WACC

Discount Factor

Disc. Cash Flows

1 123 1,0842 0,92 113 2 158 1,0842 0,85 134 3 196 1,0842 0,78 154 4 238 1,0842 0,72 172 5 283 1,0842 0,67 189 6 332 1,0842 0,62 205 7 386 1,0842 0,57 219 8 444 1,0842 0,52 232 9 507 1,0842 0,48 245

10 575 1,0842 0,45 256 After 10 21.054 1,0842 0,45 9.381 Total 11.300 Cash and Marketable Securities 687 Less: Debt 1.954 Value of Equity 10.033