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Posted on Aug 19, 2024

2) Calculate the intrinsic value of ABC given the information above and assuming -the industry that ABC is in is a fast growing industry and

2) Calculate the intrinsic value of ABC given the information above and assuming -the industry that ABC is in is a fast growing industry and peer price earnings ratios are 1.5x the market multiple -a reasonable market multiple for 2022 is 15X forward earnings (s&p 500) - ABC is expected to pay a dividend of $1.00 in 2020, 2021 and 2022 The current market price of ABC is $80. -What is current enterprise value, PE Ratio and PEG Ratio (PE/ (Growth Rate X 100)) 1) Calculate the intrinsic value of ABC Corp on a free cash flow basis assuming the following - 2019 Sales were $5 billion per year and expected to increase 20% per year - EBIT margin currently at 20% is expected to increase by 1% each of the next three years (ex 20 to 21 to 22 to 23%) - Capex as a percent of sales is expected to remain constant at 5% -tax rate of 32% (remain constant) -depreciation as % of capex will remain at constant at 20% - Change in net operating working capital will remain constant at 1% of sales - the company has $2 billion in long-term debt that matures in 10 years with a coupon of 5% - the company has $1 billion in cash and marketable securities - the company has 200 million shares outstanding - the WACC is 10.82%, Cost of Equity is 11.75% -Free cash flow in year 4 and beyond is expected to grow at 4.0% forever - what happens to your value if FCF increases by 5% per year (starting in year 4)? FCF - NOPAT + DEPRECIATION-(CAPEX + CHANGE IN NOWC) 2) Calculate the intrinsic value of ABC given the information above and assuming -the industry that ABC is in is a fast growing industry and peer price earnings ratios are 1.5x the market multiple -a reasonable market multiple for 2022 is 15% forward earnings (s&P 500) - ABC is expected to pay a dividend of $1.00 in 2020, 2021 and 2022 The current market price of ABC is $80. What is current enterprise value, PE Ratio and PEG Ratio (PE/(Growth Rate X 100)) 2) Calculate the intrinsic value of ABC given the information above and assuming -the industry that ABC is in is a fast growing industry and peer price earnings ratios are 1.5x the market multiple -a reasonable market multiple for 2022 is 15X forward earnings (s&p 500) - ABC is expected to pay a dividend of $1.00 in 2020, 2021 and 2022 The current market price of ABC is $80. -What is current enterprise value, PE Ratio and PEG Ratio (PE/ (Growth Rate X 100)) 1) Calculate the intrinsic value of ABC Corp on a free cash flow basis assuming the following - 2019 Sales were $5 billion per year and expected to increase 20% per year - EBIT margin currently at 20% is expected to increase by 1% each of the next three years (ex 20 to 21 to 22 to 23%) - Capex as a percent of sales is expected to remain constant at 5% -tax rate of 32% (remain constant) -depreciation as % of capex will remain at constant at 20% - Change in net operating working capital will remain constant at 1% of sales - the company has $2 billion in long-term debt that matures in 10 years with a coupon of 5% - the company has $1 billion in cash and marketable securities - the company has 200 million shares outstanding - the WACC is 10.82%, Cost of Equity is 11.75% -Free cash flow in year 4 and beyond is expected to grow at 4.0% forever - what happens to your value if FCF increases by 5% per year (starting in year 4)? FCF - NOPAT + DEPRECIATION-(CAPEX + CHANGE IN NOWC) 2) Calculate the intrinsic value of ABC given the information above and assuming -the industry that ABC is in is a fast growing industry and peer price earnings ratios are 1.5x the market multiple -a reasonable market multiple for 2022 is 15% forward earnings (s&P 500) - ABC is expected to pay a dividend of $1.00 in 2020, 2021 and 2022 The current market price of ABC is $80. What is current enterprise value, PE Ratio and PEG Ratio (PE/(Growth Rate X 100))