Suppose that the following Table reports three years forecasted cash flow data for Talal group. All...
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Suppose that the following Table reports three years forecasted cash flow data for Talal group. All values are in million dollars, except the number of shares. Projected Year Cash from operations Cash from investments 2024 17,800 8,900 2025 22,450 11,420 2026 24,200 13,250 The company has a discount rate of 8% and its cash flows are expected to grow at a 4% constant growth rate after 2026. The balance sheet of Talal currently reports a net debt balance of 15,400 million and owns 8000 million number of shares. Required: (a) What is the enterprise value of the company using the discounted cash flows method (DCF)? (b) Calculate the intrinsic value of the stock (value per share). Evaluate whether the stock is undervalued or overvalued, taking into consideration the current market price of $120. Suppose that the following Table reports three years forecasted cash flow data for Talal group. All values are in million dollars, except the number of shares. Projected Year Cash from operations Cash from investments 2024 17,800 8,900 2025 22,450 11,420 2026 24,200 13,250 The company has a discount rate of 8% and its cash flows are expected to grow at a 4% constant growth rate after 2026. The balance sheet of Talal currently reports a net debt balance of 15,400 million and owns 8000 million number of shares. Required: (a) What is the enterprise value of the company using the discounted cash flows method (DCF)? (b) Calculate the intrinsic value of the stock (value per share). Evaluate whether the stock is undervalued or overvalued, taking into consideration the current market price of $120.
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a Enterprise value Steps to solve 1 Calculate the terminal value The terminal value TV is the presen... View the full answer
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
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