1. Given the X company's projected income statement, projected balance sheet, interest rate on debt, interest rate on cash and ST investment, tax rate, WACC and long run growth rate , what is Xcompany's current intrinsic value of the stock?
2. ABC Corporation is expected to generate the following free cash flows over the next five years: $53 million, $68 million, $78 million, $75 million, $82 million. After 5 years, the free cash flows are expected to grow at the industry average of 4% per year. Assume that ABC corporation has $15 million of cash and short term investments, $300 million of debt, and 40 million of shares outstanding. Using the discounted free cash flow model and a weighted average cost of capital of 14%, what is the share price of ABC corporation?
3.Given the Xcompany's projected income statement, projected balance sheet, interest rate on debt, interest rate on cash and ST investment, tax rate, WACC and long run growth rate , what is Xcompany's terminal value after 5 years?
Xcompany 2 Interest rate on debt 10.00% 8.00% 3 Interest paid on cash & marketable securities 4 Tax rate 5 Weighted average cost of capital 12% 6% 6 Long-term growth rate of FCFs, g rojected Income Statement and Balance Sheet 8 Year Current Year After 1 Year After 2 Years After 3 Years After 4 Years After 5 Years 9 Income statement 10 Sales 11 Costs of goods sold 12 Interest payments on debt 13 Interest earned on cash & marketable securities 14 Depreciation 15 Profit before tax 16 Taxes 17 Profit after tax 18 Dividends 19 Retained earnings 20 Number of Shares outstanding 21 22 Balance sheet 23 Cash and marketable securities 24 Operating Current assets 25 Fixed assets 26 At cost 27Depreciation 28 Net fixed assets 29 Total assets 30 31 Operating Current liabilities 32 Debt 33 Stock 34 Accumulated retained eanings 35 Total liabilities and equity 1,000 (500) 1,100 (550) 1,210 (605) (32) 1,331 (666) 32 47 1,464 (732) (32) 1,611 (805) 65 (137) 627 85 149 374 425 (170) 554 (222) 224 (90) 135 500 255 (102) 500 (251 376 (151 (284) 426 (170 255 293 (133 176 500 500 479 182 688 928 220 165 1,070 (300) 770 1,000 1100 (409) 692 1,161 1,209 (524) 685 1,346 1,431 (788) 644 1,791 242 1,548 (937) 2,058 (650) 668 1,555 97 320 320 320 479 1,346 678 1,555 450 1,160 2,058 1,000 1,161 1,791 Xcompany Xcompany 2 Interest rate on debt 10.00% 8.00% 3 Interest paid on cash & marketable securities 4 Tax rate 5 Weighted average cost of capital 12% 6% 6 Long-term growth rate of FCFs, g rojected Income Statement and Balance Sheet 8 Year Current Year After 1 Year After 2 Years After 3 Years After 4 Years After 5 Years 9 Income statement 10 Sales 11 Costs of goods sold 12 Interest payments on debt 13 Interest earned on cash & marketable securities 14 Depreciation 15 Profit before tax 16 Taxes 17 Profit after tax 18 Dividends 19 Retained earnings 20 Number of Shares outstanding 21 22 Balance sheet 23 Cash and marketable securities 24 Operating Current assets 25 Fixed assets 26 At cost 27Depreciation 28 Net fixed assets 29 Total assets 30 31 Operating Current liabilities 32 Debt 33 Stock 34 Accumulated retained eanings 35 Total liabilities and equity 1,000 (500) 1,100 (550) 1,210 (605) (32) 1,331 (666) 32 47 1,464 (732) (32) 1,611 (805) 65 (137) 627 85 149 374 425 (170) 554 (222) 224 (90) 135 500 255 (102) 500 (251 376 (151 (284) 426 (170 255 293 (133 176 500 500 479 182 688 928 220 165 1,070 (300) 770 1,000 1100 (409) 692 1,161 1,209 (524) 685 1,346 1,431 (788) 644 1,791 242 1,548 (937) 2,058 (650) 668 1,555 97 320 320 320 479 1,346 678 1,555 450 1,160 2,058 1,000 1,161 1,791 Xcompany
