toyota buy in price, page-18

> Can anyone who has some experience with financial modelling tell why the 60 % debt scenarios are valued HIGHER than their zero debt counterparts?

Valuation is the present value of future income streams, year on year, but future income is discounted because of the time value of money. In other words, tomorrow's dollar is only worth 95c today if your required rate of return is about 5%.

Funding is a mix of debt and equity. Debt incurs ongoing interest on the capital but these payments in the future are again discounted for the same reason as above.

Whereas equity involves dilution up front - an immediate cost in terms of the value of each share.

So if the interest rate on debt is low enough, it will give a better valuation *per existing_share* than just raising funds by issuing shares.