TVS VN Index

Date Price Return Date Price Return

8/1/2022 32,000.00 0.011058452 8/1/2022 1,279.39 0.060563859
7/1/2022 31,650.00 -0.018604651 7/1/2022 1,206.33 0.007289579
6/1/2022 32,250.00 -0.0625 6/1/2022 1,197.60 -0.073552619
5/1/2022 34,400.00 -0.022727273 5/1/2022 1,292.68 -0.054228856
4/1/2022 35,200.00 -0.222958057 4/1/2022 1,366.80 -0.0840063
3/1/2022 45,300.00 -0.034115139 3/1/2022 1,492.15 0.001355586
2/1/2022 46,900.00 0.090697674 2/1/2022 1,490.13 0.007552605
1/1/2022 43,000.00 -0.289256198 1/1/2022 1,478.96 -0.012894786
12/1/2021 60,500.00 0.255186722 12/1/2021 1,498.28 0.01341955
11/1/2021 48,200.00 0.357746479 11/1/2021 1,478.44 0.023659011
10/1/2021 35,500.00 0.148220743 10/1/2021 1,444.27 0.076159039
9/1/2021 30,917.40 -0.056023546 9/1/2021 1,342.06 0.007953615
8/1/2021 32,752.30 0.427999023 8/1/2021 1,331.47 0.016350521
7/1/2021 22,935.80 0.018332453 7/1/2021 1,310.05 -0.06993007
6/1/2021 22,522.90 0.072049388 6/1/2021 1,408.55 0.060615188
5/1/2021 21,009.20 0.243523193 5/1/2021 1,328.05 0.071535191
4/1/2021 16,894.90 -0.090904688 4/1/2021 1,239.39 0.040245417
3/1/2021 18,584.30 0.094236861 3/1/2021 1,191.44 0.019658185
2/1/2021 16,983.80 0.15758121 2/1/2021 1,168.47 0.105866876
1/1/2021 14,671.80 0.134017113 1/1/2021 1,056.61 -0.042813012
12/1/2020 12,937.90 0.212503749 12/1/2020 1,103.87 0.10048052
11/1/2020 10,670.40 0.132065863 11/1/2020 1,003.08 0.083860093
10/1/2020 9,425.60 0.069814426 10/1/2020 925.47 0.022381547
9/1/2020 8,810.50 -0.009165542 9/1/2020 905.21 0.026722622
8/1/2020 8,892.00 0.02829785 8/1/2020 881.65 0.104284873
7/1/2020 8,647.30 0.009526367 7/1/2020 798.39 -0.032383561
6/1/2020 8,565.70 -0.036695906 6/1/2020 825.11 -0.045530788
5/1/2020 8,892.00 -0.00909334 5/1/2020 864.47 0.123987466
4/1/2020 8,973.60 -0.022228033 4/1/2020 769.11 0.160868187
3/1/2020 9,177.60 -0.013150679 3/1/2020 662.53 -0.248993981
2/1/2020 9,299.90 -0.113670587 2/1/2020 882.19 -0.058113216
1/1/2020 10,492.60 -0.057141573 1/1/2020 936.62 -0.025359265
12/1/2019 11,128.50 0.147540138 12/1/2019 960.99 -0.010054082
11/1/2019 9,697.70 0.065505686 11/1/2019 970.75 -0.028103162
10/1/2019 9,101.50 0.004381028 10/1/2019 998.82 0.002267801
9/1/2019 9,061.80 -0.029785867 9/1/2019 996.56 0.012702477
8/1/2019 9,340.00 -0.028924331 8/1/2019 984.06 -0.007663917
7/1/2019 9,618.20 0.008334469 7/1/2019 991.66 0.043918563
6/1/2019 9,538.70 0.042845585 6/1/2019 949.94 -0.010355461
5/1/2019 9,146.80 0.035455533 5/1/2019 959.88 -0.020170675
4/1/2019 8,833.60 -0.040816548 4/1/2019 979.64 -0.001141972
3/1/2019 9,209.50 0.057554287 3/1/2019 980.76 0.015836846
2/1/2019 8,708.30 -0.021121378 2/1/2019 965.47 0.060198759
1/1/2019 8,896.20 0.059702204 1/1/2019 910.65 0.020290407
12/1/2018 8,395.00 -0.021903763 12/1/2018 892.54 -0.036695663
11/1/2018 8,583.00 0.030075368 11/1/2018 926.54 0.012877695
10/1/2018 8,332.40 -0.02919725 10/1/2018 914.76 -0.100645935
9/1/2018 8,583.00 0.030075368 9/1/2018 1,017.13 0.027881642
8/1/2018 8,332.40 -0.014814902 8/1/2018 989.54 0.034661592
7/1/2018 8,457.70 0.04072994 7/1/2018 956.39 -0.004569204
6/1/2018 8,126.70 0.104471324 6/1/2018 960.78 -0.010779923
5/1/2018 7,358.00 -0.014703125 5/1/2018 971.25 -0.075228991
4/1/2018 7,467.80 0.04615945 4/1/2018 1,050.26 -0.105750728
3/1/2018 7,138.30 0.01562211 3/1/2018 1,174.46 0.04718512
2/1/2018 7,028.50 -0.007750515 2/1/2018 1,121.54 0.010068807
1/1/2018 7,083.40 0.151772358 1/1/2018 1,110.36 0.128139478
12/1/2017 6,150.00 0.154647692 12/1/2017 984.24 0.036118451
11/1/2017 5,326.30 0.005189854 11/1/2017 949.93 0.134542805
10/1/2017 5,298.80 -0.080962953 10/1/2017 837.28 0.040849308
9/1/2017 5,765.60 -0.009432179 9/1/2017 804.42 0.027671317
8/1/2017 5,820.50 8/1/2017 782.76
Slope 0.49
Cov 0.00221 0.5
Var 0.004525 0.4
Beta 0.49 0.3
0.2
0.1
f(x) = 0.487717850425659 x + 0.0299582570131734
R² = 0.0794923619904224 0
-0.3 -0.25 -0.2 -0.15 -0.1 -0.05 0 0.05 0.1 0.15 0.2
-0.1
-0.2
-0.3
-0.4

We can see that beta =0.49 < 1. That means the risk of TVS is less than th
 4

0.05 0.1 0.15 0.2

sk of TVS is less than the risk of market.

VN index Vietnam 10-year Treasury bonds
Date Price Return Date Price Return
1/6/2022 1,299.52 -2.86% 1/6/2022 3.262 44.78%
1/6/2021 1,337.78 52.25% 1/6/2021 2.253 -27.93%
1/6/2020 878.67 -7.16% 1/6/2020 3.126 -33.23%
3/6/2019 946.47 -4.67% 3/6/2019 4.682 0.39%
1/6/2018 992.87 33.85% 1/6/2018 4.664 -20.48%
1/6/2017 741.8 19.67% 1/6/2017 5.865 -15.53%
1/6/2016 619.86 7.81% 1/6/2016 6.943 6.19%
1/6/2015 574.98 3.27% 1/6/2015 6.538 -24.48%
2/6/2014 556.8 7.69% 2/6/2014 8.657 -2.53%
3/6/2013 517.03 20.58% 3/6/2013 8.882 -9.74%
1/6/2012 428.80 1/6/2012 9.841

Rm 10 years 13.04%
Equity Risk Premium* 7.80%
Rf 10 years -8.26%
Rf 2022** 3.64%
Beta 0.49
Ri = Risk Free Rate + Beta * Equity Risk Premium = 7.46%
Ri 14.08%
*https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/ctryprem.html
**http://www.worldgovernmentbonds.com/bond-historical-data/vietnam/10-years/
Year Net sales % Change in sales EBIT % Change in EBIT
2011 344,908 71,053
2012 166,409 -51.75% 45,674 -35.72%
2013 160,063 -3.81% 92,400 102.30%
2014 175,607 9.71% 98,935 7.07%
2015 206,901 17.82% 109,239 10.41%
2016 167,510 -19.04% 70,678 -35.30%
2017 413,585 146.90% 203,493 187.92%
2018 486,058 17.52% 176,817 -13.11%
2019 425,508 -12.46% 137,004 -22.52%
2020 635,319 49.31% 288,672 110.70%
2021 1042046 64.02% 657,232 127.67%
Average 2012-2021 21.82% 43.94%
Operating leverage 201.37%
Year Total liabilities Equity D/E Average D/E 136.86%
2012 433,868 449,344 96.56% Pre-tax income 644
2013 185,156 475,332 38.95% Net income 517
2014 239,521 511,768 46.80% Tax expense 127
2015 150,237 573,800 26.18% Tax rate 19.72%
2016 751,095 610,049 123.12% Beta 0.49
2017 867,952 745,121 116.48%
2018 1,811,425 873,750 207.32% Unlevered beta 0.23
2019 2,006,462 980,278 204.68%
2020 2,602,903 1,308,177 198.97%
2021 5,432,205 1,754,912 309.54%
Debt to capital Debt/equity ratio Levered Beta
0.00% 0% 0.23
10.00% 11.11% 0.25
20.00% 25.00% 0.28
30.00% 42.86% 0.31
40.00% 66.67% 0.35
50.00% 100.00% 0.41
60.00% 150.00% 0.51
70.00% 233.33% 0.66
80.00% 400.00% 0.97
90.00% 900.00% 1.89

Unlevered beta 0.23

Tax rate 19.72%
Debt 5,432,205
Equity 1,754,912
Interest expense 187,203
Tax rate 19.72%
Cost of debt 2.77%
Cost of equity 7.46%
WACC 3.50%
Debt to capital Cost of debt Total Debt Interest expense EBIT Int.cov ratio
0.00% 0% 0.00 0.00 644,011 ∞
10.00% 11.11% 718,711.7 99,462.97 644,011 6.474882257466
20.00% 25.00% 1,437,423.4 447,628.11 644,011 1.438718837609
30.00% 42.86% 2,156,135.1 1,151,120.46 644,011 0.55946447255
40.00% 66.67% 2,874,846.8 2,387,469.31 644,011 0.269746294737
50.00% 100.00% 3,593,558.5 4,476,281.14 644,011 0.143871883761
60.00% 150.00% 4,312,270.2 8,057,306.05 644,011 0.079928824312
70.00% 233.33% 5,030,981.9 14,622,309.50 644,011 0.044043042583
80.00% 400.00% 5,749,693.6 28,648,199.30 644,011 0.022479981838
90.00% 900.00% 6,468,405.3 72,515,754.48 644,011 0.008880980479
Ranking Spread Cost of debt (country default) Debt
0% Equity
A1/A+ 0.85% 11.96% Interest expense
B3/B− 7.25% 32.25% Tax rate
C2/C 10.50% 53.36% Cost of debt
C2/C 10.50% 77.17% Cost of equity
D2/D 12% 112.00% WACC
D2/D 12% 162.00% Value of TVS
D2/D 12% 245.33%
D2/D 12% 412.00%
D2/D 12% 912.00%
5,432,205
1,754,912
187,203
19.72%
2.77%
7.46%
3.50%
7,187,117
1. Post merger data
g ROE X Retention rate 8.800% Sales in unit
ROE 16% Price per unit
Retention rate 55.00% Sales
Rf 3.50% COGS
Rm 9% S&A expenses
Beta before merger 1.10 Depreciation expenses
Debt before merger 30% EBIT
Debt after merger 60% EBIT(1-T)
Tax before merger 35%
Tax after merger 40% Capital expenditure
Unlevered beta 0.86 Change in NWC
Levered beta 1.63 CFFF
Cost of equity after me 12.49%
Cost of debt after merg 12% Firm value in 2027
WACC after merger 9.32% Firm value in 2022
Debt 4,000,000 Firm value = Total debt + Total equity + Total
Total equity
7020000 Stock price
To have the ownership of 55% we must pay
Total number of stock need to accquire

each year the firm needs to spend extra $2,00

 2023 2024 2025 2026 2027
300 450 570 650 800
40,000 38,000 35,000 33,000 33,000
12,000,000 17,100,000 19,950,000 21,450,000 26,400,000
4,500,000 7,020,000 9,247,680 10,967,424 14,038,303
1,500,000 2,340,000 3,082,560 3,655,808 4,679,434
1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
5,000,000 6,740,000 6,619,760 5,826,768 6,682,263
3000000 4,044,000 3,971,856 3,496,060.80 4,009,357.82

2,000,000 2,000,000 2,000,000 2,000,000 2,000,000

0 0 0 0 0
2,000,000 3,044,000 2,971,856 2,496,060.80 3,009,357.82

634,284,042.14
417,388,801.41
Total debt + Total equity + Total Preferred stock
413,388,801.41
413.39
ownership of 55% we must pay 227,363,840.78
r of stock need to accquire 550,000

e firm needs to spend extra $2,000,000 for fixed assets;

g ROE X Retention rate 8.4% Sales in unit
ROE 21% Price per unit
Retention rate 40% Sales
Rf 4% COGS
Rm 10% S&A expenses
Beta before merger 1.5 Depreciation expenses
Debt before merger 60% EBIT
Debt after merger 40% EBIT(1-T)
Tax before merger 45%
Tax after merger 40% Capital expenditure
Unlevered beta 0.82 Change in NWC
Levered beta 1.15 CFFF
Cost of equity after merger 10.90%
Cost of debt after merger rd 9% Firm value in 2027
WACC after merger 8.70% Firm value in 2022
Debt 4,000,000 Firm value = Total debt + Total equity +
Total equity
Stock price
To have the ownership of 65% we mus
Total number of stock need to accquir
 2023 2024 2025 2026 2027
400 550 670 750 900
50,000 48,000 45,000 43,000 42,000
20,000,000 26,400,000 30,150,000 32,250,000 37,800,000
10,000,000 14,162,500 17,770,075 20,488,631 25,323,948
3,200,000 4,532,000 5,686,424 6,556,362 8,103,663
1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
5,800,000 6,705,500 5,693,501 4,205,007 3,372,388
3,480,000 4,023,300 3,416,101 2,523,004 2,023,433

3,000,000 3,000,000 3,000,000 3,000,000 3,000,000

- - - - -
1,480,000 2,023,300 1,416,101 523,004 23,433

8,398,100.61
10,099,634.66
Total debt + Total equity + Total Preferred stock
6,099,634.66
3.05
ownership of 65% we must pa 3,964,762.53
r of stock need to accquire 1,300,000
g
ROE X Retention rate 8.75%
ROE 25%
Retention rate 35%
Rf 4%
MRP 9.50%
Beta before merger 1.4
Debt before merger 55%
Debt after merger 45%
Tax before merger 35%
Tax after merger 30%
Unlevered beta 0.78
Levered beta 1.23
Cost of equity after merger 15.66%
Debt 4,000,000
Interest expense 30,000
 2023 2024
Sales in unit 400 550
Price per unit 5,000 8,000
Sales 2,000,000 4,400,000
COGS 440,000 623,150
S&A expenses 80,000 113,300
Fixed cost 50000 51500
Depreciation expenses 500,000 500,000
EBIT 930,000 3,112,050
Interest expense 30,000 30,000
EBT 900,000 3,082,050
Taxes 270,000 924,615
Net income 630,000 2,157,435
CAPEX 400,000 400,000
NWC 100,000 220,000
∆NWC 100,000 120,000
Debt issued 160,000 160,000
Debt repaid 32,000 32,000
Di -Dr 128,000 128,000

CFFE 758,000 2,265,435

Firm value in 2027 12,018,872.17

Firm value in 2022 #REF!
Firm value = Total debt + Total equity + Total Preferred stock
Total equity #REF!
Stock price #REF!
To have the ownership of 65% we must pay #REF!
Total number of stock need to accquire #REF!
 2025 2026 2027
670 750 900
4,000 3,000 3,000
2,680,000 2,250,000 2,700,000
781,883 901,500 1,114,254
142,161 163,909 202,592
53045 54636.35 56275.4405
500,000 500,000 500,000
1,202,911 629,955 826,879
30,000 30,000 30,000
1,172,911 599,955 796,879
351,873 179,986 239,064
821,038 419,968 557,815
400,000 400,000 400,000
134,000 112,500 135,000
(86,000) (21,500) 22,500
160,000 160,000 160,000
32,000 32,000 32,000
128,000 128,000 128,000

1,135,038 669,468 763,315

g
ROE X Retention rate 8.75%
ROE 25%
Retention rate 35%
Rf 4%
MRP 9.50%
Beta before merger 1.4
D/E before merger 1.5
D/E after merger 1.3
Tax before merger 35%
Tax after merger 30%
Unlevered beta 0.71
Levered beta 1.35
Cost of equity after merger 16.86%
Cost of debt after merger rd 8%
WACC after merger 12.36%
Debt 4,000,000
 2023 2024
Sales in unit 400 550
Price per unit 5,000 8,000
Sales 2,000,000 4,400,000
COGS 440,000 623,150
S&A expenses 80,000 113,300
Depreciation expenses 50,000 50,000
EBIT 1,430,000 3,613,550
EBIT(1-T) 1,001,000 2,529,485
CAPEX 400,000 400,000
NWC 100,000 220,000
∆NWC 100,000 120,000
CFFF 551,000 2,059,485

Firm value in 2027 16,903,471.27

Firm value in 2022 338,691,172.22
Firm value = Total debt + Total equity + Total Preferred stock
Total equity 334,691,172.22
Stock price 167.35
To have the ownership of 51% we must pay 170,692,497.83
Total number of stock need to accquire 1,020,000
 2025 2026 2027
670 750 900
4,000 3,000 3,000
2,680,000 2,250,000 2,700,000
781,883 901,500 1,114,254
142,161 163,909 202,592
50,000 50,000 50,000
1,705,956 1,134,591 1,333,155
1,194,169 794,214 933,208
400,000 400,000 400,000
134,000 112,500 135,000
(86,000) (21,500) 22,500
930,169 465,714 560,708