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11. You are given the following financial data. The firm has a 30% tax rate and 9% weighted average cost of capital (WACC). Assets 2015

11. You are given the following financial data. The firm has a 30% tax rate and 9% weighted average cost of capital (WACC).

Assets

2015

2016

Income Statement

2016

Cash

$7,200

$5,826

Sales

$4,667,520

AR

$280,960

$505,728

COGS

$2,241,000

Inventories

$572,160

$1,029,888

Other expenses

$576,000

Total CA

860,320

1,541,442

Deprec.

$93,568

Gross FA

$392,800

$962,360

EBIT

1,756,952

Less: Depr.

$116,960

210,528

Int. expense

$9,078

Net FA

275,840

751,832

Pre-tax earnings

1,747,874

Total assets

$1,136,160

$2,293,274

Taxes

524,362

Net income

$1,223,512

Liabilities & Equity

Accts. payable

$116,480

$259,200

Accruals

$108,800

$227,968

Total CL

225,280

487,168

Long-term debt

$379,866

$51,579

Common stock

$368,000

$368,000

Ret. earnings

$163,014

1,386,526

Total equity

531,014

1,754,526

Total L&E

$1,136,160

$2,293,274

a. What is the firms free cash flow for 2016?

b. What is the firms economic value added (EVA) for 2016?

c. What is the firms return on invested capital (ROIC) for 2016?

d. What is the firms estimated stock price value if free cash flows are expected to grow at a constant 4.5% rate per year and the firm has 150,000 shares outstanding?

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