An analyst is trying to value Jasons Specialties (JS) stock The analyst has collected data from the company and other sources to prepare the below financials, both actual and projected Based upon these sources, the analyst expects the companys free cash flows to grow at 4 on average The analyst has estimated the companys cost of capital (WACC) to be 16 and its cost of equity to be 21 The risk free rate is 2 3 What is JSs NOWC in years 2019 and 2020 Compute the firms FCF (free cash flow) for year 2020 Find the value of the firm using ECF method and price per share assuming that there are 10,000,000 shares issued and outstanding What is the External Financing Needed for year 2020 Explain your calculation Suppose that the firm's probability of bankruptcy is estimated to be 5 and the economic loss associated with bankruptcy is likely to amount to $55,000,000 What valuation method would allow you to take this into account Describe briefly how you would implement it (you do not have enough information to actually do the calculations, so no need to try) Income statement for the fiscal year ending January 1 (Millions of dollars) 2019 (Actual) 2020 (Projected) Net Sales $400 0 $430 0 Costs 260 0 283 5 Depreciation 37 5 42 5 Earnings before interest and taxes 102 5 104 0 Interest expense 14 1 16 0 Earnings before taxes 88 4 89 9 Taxes (40 ) 35 36 35 2 Net income before preferred dividends 53 04 52 8 Preferred dividends 6 0 6 5 Net income 47 04 46 3 Common dividends 37 632 38 2 Addition to retained earnings 9 0408 8 1 Balance sheets for the fiscal year ending January 1 (Millions of dollars) 2019 (Actual) 2020 (Projected) Cash $6 3 $3 6 Marketable Securities 40 9 39 128 Accounts Receivable 62 0 67 0 Inventories 107 0 105 5 Net plant equipment 391 0 415 36 Total Assets 607 2 630 58 Accounts payable 9 6 12 1 Accruals 25 5 29 1 Long term bonds 210 7 217 78 Preferred Stock 55 57 1 Common Stock (Par plus PIC) 160 0 160 0 Retained earnings 146 4 154 5 Total Liabilities Equity 607 2 630 58

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An analyst is trying to value Jasons Specialties (JS) stock. The analyst has collected data from the company and other sources to prepare the below

An analyst is trying to value Jasons Specialties (JS) stock. The analyst has collected data from the company and other sources to prepare the below financials, both actual and projected. Based upon these sources, the analyst expects the companys free cash flows to grow at 4% on average. The analyst has estimated the companys cost of capital (WACC) to be 16% and its cost of equity to be 21%. The risk-free rate is 2.3%..

What is JSs NOWC in years 2019 and 2020?
Compute the firms FCF (free cash flow) for year 2020.
Find the value of the firm using ECF method and price per share assuming that there are 10,000,000 shares issued and outstanding
What is the External Financing Needed for year 2020? Explain your calculation
Suppose that the firm's probability of bankruptcy is estimated to be 5% and the economic loss associated with bankruptcy is likely to amount to $55,000,000. What valuation method would allow you to take this into account? Describe briefly how you would implement it (you do not have enough information to actually do the calculations, so no need to try).

Income statement for the fiscal year ending January 1 (Millions of dollars)

2019 (Actual)		2020 (Projected)
Net Sales	$400.0		$430.0
Costs	260.0		283.5
Depreciation	37.5		42.5
Earnings before interest and taxes	102.5		104.0
Interest expense	14.1		16.0
Earnings before taxes	88.4		89.9
Taxes (40%)	35.36		35.2
Net income before preferred dividends	53.04		52.8
Preferred dividends	6.0		6.5
Net income	47.04		46.3
Common dividends	37.632		38.2
Addition to retained earnings	9.0408		8.1

Balance sheets for the fiscal year ending January 1 (Millions of dollars)

2019 (Actual)		2020 (Projected)
Cash	$6.3		$3.6
Marketable Securities	40.9		39.128
Accounts Receivable	62.0		67.0
Inventories	107.0		105.5
Net plant & equipment	391.0		415.36
Total Assets	607.2		630.58
Accounts payable	9.6		12.1
Accruals	25.5		29.1
Long-term bonds	210.7		217.78
Preferred Stock	55		57.1
Common Stock (Par plus PIC)	160.0		160.0
Retained earnings	146.4		154.5
Total Liabilities & Equity	607.2		630.58