Damodaran on Valuation_ Security Analysis for Investment and Corporate Finance ( PDFDrive )

Thevalueofthefirmobtainedbydiscountingfreecashflows
tothefirmatthecostofcapitalis$170.85,whichisidentical
to the value obtained using the economic value added
approach in the preceding table.

ILLUSTRATION 6.8: An EVA Valuation of Titan Cement

The equivalence of traditional DCF valuation and EVA
valuationcanbeillustratedforTitanCement.Webeginwith
adiscountedcashflowvaluationofTitanandsummarizethe
inputs we used in the following table:

High-Growth

Phase

Stable-Growth

Phase

Length Five years Forever after year 5

Growth inputs

Reinvestment rate 28.54% 51.93%

Return on capital 19.25% 6.57%