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

constantatCoca-Cola’scurrentlevelof$16,406million.The
following table summarizes the values:

Value of Coca-Cola

With Current Excess Return

With No Excess Return Capital invested (book values of debt and equity) $16,406 million

$16,406

million High-Growth Period Length of high-growth period (n) 10 years 10 years

Reinvestment rate, as% of EBIT(1 −t)

50% 50%

Return on capital (after-tax) 20.84% 7.65% Growth rate during period (g)

10.42% 3.83%

Cost of capital during period7.65% 7.65% Stable-Growth Period Growth rate in steady state 4% 4% Return oncapital in steady state

7.65% 7.65%

Reinvestment rate in stable growth

52.28% 52.28%

Cost of capital in steady state

7.65% 7.65%

Value of firm $79,611.25 $17,053.55

The value that we get for brand name in this case is:

$16,406