1. Find the COC and use that to find the price of the stock (update: use CAPM approach to find COC)
2. Find the Market Value of the firm (MV of firm) and use that to find the WACC, then find the price like in #1, but this time using WACC
TY, will leave positive score for answers
8 Today 9488.80 1 FYI 7.00% 60.00% 28.00% 38.00% 38.00% 15.00% 2 FY2 6.50% 60.00% 27.50% 38.00% 38.00% 14.00% FY3 6.50% 59.50% 27.00% 38.00% 38.00% 13.00% FY4 6.50% 59.50% 26.50% 38.00% 38.00% 12.00% 5 FY5 6.00% 59.00% 26.00% 38.00% 38.00% 11.00% 6 FY6 6.00% 59.00% 25.50% 38.00% 38.00% 10.00% FYZ 6.00% 58.50% 25.00% 38.00% 38.00% 10.00% FYS 6.00% 58.50% 25.00% 38.00% 38.00% 10.00% 9 FY9 6.00% 58.00% 25.00% 38.00% 38.00% 10.00% 10 FY10 6.00% 58.00% 25.00% 38.00% 38.00% 10.00% 3625.30 1786.70 WACC MV of Firm 4.00% 2 Assumptions 3 Revenue growth(%) 4 COGS/Sales(%) 5 S&A/Sales(%) 6 Tax Rate(%) 7 Current assets/Sales(%) 8 Current liability/Sales(%) 9 Yearly depreciation equals capex. 10 Cost of Capital 11 Termnial Grwoth Rate (%) 12 13 Based on the given information, please calculate the stock price per 14 share 15 Rev 16 COS 17 S&A 18 EBIT 19 TAX 20 OCF 21 22 Change in NWC 23 24 FCF 25 Terminal Value 10153.016010812.9620 11515.8046 12264.331913000.1918 13780.2033 14607.0155 15483.4364 16412.4426 17397.1892 6091.8096 6487.777224 6851.903721 7297.277463 7670.1131518130.31994 8545.104059 9057.810303 9519.216708 10090.36971 2842.84448 2973.564561 3109.267235 3250.047946 3380.049863 3513.951839 3651.753872 3870.859104 4103.11065 4349.297289 1218.3619 1351.6203 1 554.6336 1717.0065 1950.0288 2135.9315 2410.1576 2554.7670 2790.1152 2957.5222 462.9775296 513.6156969 590.7607746 652.4624555 741.0109316 811.6539737 915.859871 970.8114632 1060.243792 1123.85842 755.3844 838.0046 963.8728 1064.5440 1209.0178 1324.2775 1494.2977 1583.9555 1729.8715 1833.6637 496.59368 259.9172096 283.8402536 309.775143 321.325495 348.4051398 231.5074153 245.3978602 260.1217318 275.7290357 258.7907 578.0873 680.0326 754.7689 887.6923 975.8724 1262.7903 1338.5577 1469.7497 1557.9347 27 PV of FCF 20 C K L M Historical Equity Risk Premium N O P Company Current Beta 0.69 D F G H Current Yield on Publicly Traded Company Debt Coupon 6.75% Annual Price 95.80 Year until Muturity 19 Face Value 100.00 1 Current Yields on U.S. Treasuries Today 2 3 mon 3.59% 36 mon 3.59% 4 1 year 3.59% 5 5 year 4.88% 6 10 year 4.39% 7 20 year 5.74% 8 Arithmetic Mean 7.50% G H Income Statement This Year (Millions) Revenue 9488.8 Cost and Expenses COS 5784.9 S&A 2689.7 Intereste Expense Other Income/Expense 34.2 Restructiong Charge (Net) -0.1 Total Costs and Expenses 8567.4 Income before Income Tax 921.4 Income Taxes 331.7 Net Income 589.7 Balance Sheet (Millions) Current Asset Current Liability Cash and Cash Equivalent 304 Current portion of LD 5.4 AR 1621.4 Notes Payable 855.3 Inventories 1424.1 Account Payable 432 Deffereed Income Taxes 113.3 Accrued Liability 472.1 Prepaid Exensed 162.5 Income Tax Payable 21.9 Total Current Assets 3625.3 Total Current Liability 1786.7 58.7 PPP 1618.8 Intagible and Goodwill 397.3 Deferred income tax and other assets 178.2 Long-term debt 435.9 Deferred income taxs and Other Liability 102.2 Redeemable PS 0.3 Shareholder's Equity 3494.5 Total Liabilities and SE 5819.6 Current Value of Debt 1296.6 Total Assets 5819.6 Current Share OutStandin 230 8 Today 9488.80 1 FYI 7.00% 60.00% 28.00% 38.00% 38.00% 15.00% 2 FY2 6.50% 60.00% 27.50% 38.00% 38.00% 14.00% FY3 6.50% 59.50% 27.00% 38.00% 38.00% 13.00% FY4 6.50% 59.50% 26.50% 38.00% 38.00% 12.00% 5 FY5 6.00% 59.00% 26.00% 38.00% 38.00% 11.00% 6 FY6 6.00% 59.00% 25.50% 38.00% 38.00% 10.00% FYZ 6.00% 58.50% 25.00% 38.00% 38.00% 10.00% FYS 6.00% 58.50% 25.00% 38.00% 38.00% 10.00% 9 FY9 6.00% 58.00% 25.00% 38.00% 38.00% 10.00% 10 FY10 6.00% 58.00% 25.00% 38.00% 38.00% 10.00% 3625.30 1786.70 WACC MV of Firm 4.00% 2 Assumptions 3 Revenue growth(%) 4 COGS/Sales(%) 5 S&A/Sales(%) 6 Tax Rate(%) 7 Current assets/Sales(%) 8 Current liability/Sales(%) 9 Yearly depreciation equals capex. 10 Cost of Capital 11 Termnial Grwoth Rate (%) 12 13 Based on the given information, please calculate the stock price per 14 share 15 Rev 16 COS 17 S&A 18 EBIT 19 TAX 20 OCF 21 22 Change in NWC 23 24 FCF 25 Terminal Value 10153.016010812.9620 11515.8046 12264.331913000.1918 13780.2033 14607.0155 15483.4364 16412.4426 17397.1892 6091.8096 6487.777224 6851.903721 7297.277463 7670.1131518130.31994 8545.104059 9057.810303 9519.216708 10090.36971 2842.84448 2973.564561 3109.267235 3250.047946 3380.049863 3513.951839 3651.753872 3870.859104 4103.11065 4349.297289 1218.3619 1351.6203 1 554.6336 1717.0065 1950.0288 2135.9315 2410.1576 2554.7670 2790.1152 2957.5222 462.9775296 513.6156969 590.7607746 652.4624555 741.0109316 811.6539737 915.859871 970.8114632 1060.243792 1123.85842 755.3844 838.0046 963.8728 1064.5440 1209.0178 1324.2775 1494.2977 1583.9555 1729.8715 1833.6637 496.59368 259.9172096 283.8402536 309.775143 321.325495 348.4051398 231.5074153 245.3978602 260.1217318 275.7290357 258.7907 578.0873 680.0326 754.7689 887.6923 975.8724 1262.7903 1338.5577 1469.7497 1557.9347 27 PV of FCF 20 C K L M Historical Equity Risk Premium N O P Company Current Beta 0.69 D F G H Current Yield on Publicly Traded Company Debt Coupon 6.75% Annual Price 95.80 Year until Muturity 19 Face Value 100.00 1 Current Yields on U.S. Treasuries Today 2 3 mon 3.59% 36 mon 3.59% 4 1 year 3.59% 5 5 year 4.88% 6 10 year 4.39% 7 20 year 5.74% 8 Arithmetic Mean 7.50% G H Income Statement This Year (Millions) Revenue 9488.8 Cost and Expenses COS 5784.9 S&A 2689.7 Intereste Expense Other Income/Expense 34.2 Restructiong Charge (Net) -0.1 Total Costs and Expenses 8567.4 Income before Income Tax 921.4 Income Taxes 331.7 Net Income 589.7 Balance Sheet (Millions) Current Asset Current Liability Cash and Cash Equivalent 304 Current portion of LD 5.4 AR 1621.4 Notes Payable 855.3 Inventories 1424.1 Account Payable 432 Deffereed Income Taxes 113.3 Accrued Liability 472.1 Prepaid Exensed 162.5 Income Tax Payable 21.9 Total Current Assets 3625.3 Total Current Liability 1786.7 58.7 PPP 1618.8 Intagible and Goodwill 397.3 Deferred income tax and other assets 178.2 Long-term debt 435.9 Deferred income taxs and Other Liability 102.2 Redeemable PS 0.3 Shareholder's Equity 3494.5 Total Liabilities and SE 5819.6 Current Value of Debt 1296.6 Total Assets 5819.6 Current Share OutStandin 230
