Question
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 |
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Accruals | $108,800 | $227,968 |
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Total CL | 225,280 | 487,168 |
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Long-term debt | $379,866 | $51,579 |
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Common stock | $368,000 | $368,000 |
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Ret. earnings | $163,014 | 1,386,526 |
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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?
Show work with formulas please!
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