8. (17) You have estimated the financial statements for next year. You expect remated at by 10% in Y2, 6% in Y3 and 4% on average thereafter. The expect free cash flows to grow capital is Assume today is January of Y1. Estimate the share price if there are 10M outstanding. cost of at10%. GRAVEL: INCOME STATEMENT (MS) Fiscal Year Ending YO (Actual) Y1 (Projected) Sales 425 350 150 75 25 100 Cost of Goods Sold SG&A 75 Depreciation 125 Earnings Before Interest&Tax (EBIT) Interest Expense 20 100 Earnings Before Tax 20 Taxes (25%) Net Income 10 10 50 Dividends Additions to Retained Earnings GRAVEL: BALANCE SHEET (MS) Fiscal Year Ending YO (Actual) Y1 (Projected) 150 250 350 750 1275 (225) 1,050 1,800 100 200 300 Cash Accounts Receivable Inventories Total Current Assets 1200 (200) 1,000 1,600 50 150 250 350 800 1,600 Gross Fixed Assets (PP&E) Accumulated Depn Net Fixed Assets TOTAL ASSETS Accruals Accounts Payable Long Term Debt Common Stock 195 300 350 865 1,800 Retained Earnings Total Liability & Equity (17) You have estimated the financial by 10% in Y2, 6% in Y3 and 4% Assume today is January of Y1. Estimate the share price if there are 10M she 8. statements for next year. You expect free cash flows to grow on average thereafter. The cost of capital is estimated at 10%. outstanding. GRAVEstt