p. 6 p. 9 p. 12 - Liga de Mercado Financeiro FEA-USP

DAMODARAN: VALUATION DO FACEBOOK
4. Reinvestment: In one of a series of posts on growth, I argued that growth does
not come free (or even cheap). That is true for even a company with the pedigree
of Facebook. There is some information in the financial statements about
reinvestment: the company had net capital expenditures of $ 283 million, an
acquisition that cost $24 million and an increase in capital leases of about $ 480
million. To estimate reinvestment in future years, I assumed that the firm would
be able to generate about $1.5 million in revenues for every million in additional
capital investment. At this stage, it is impossible to tell what form the
reinvestment may take, but looking at Google over the last few years should
provide clues; the company has moved increasingly to using acquisitions to
augment growth. Lest you feel that I am being too conservative, I am estimating
that Facebook will generate a return on its capital of about 32% in year 10, up
from just over 26% now.
FEVEREIRO 2013
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MARKETS ST