Answer the following question if the risk-free rate of interest is 3% and the market risk premium is 5%.

a. )What is the value of the Feed Ingredients if its cash flow grows at its expected rate?

b.) What is the value of the Food Ingredients if its cash flow grows at its expected rate?

c.) What is the value of Fuel Ingredients if its cash flow grows at its expected rate?

In fiscal year 2021 , the Company generated $4.7 billion in revenues and $650.9 million in net income attributable to Darling. The Company's stock price is $72.90 with 160.37 million shares outstanding. The five-year monthly beta is 1.23. The company has recently experienced decline in its Fuel Ingredients revenue due to high cost of diesel fuel and has contemplated to divest itself from this segment. The Fuel Ingredients revenue portion was about 9.10% of the total sales in 2021 . Table-1 shows Darling's net sales from fiscal year 2021, 2020 and 2019 continuing operations by operating segment were as follows (in thousands): On January 1, 2022, the Company had net income of $650,914 with the total asset of $6,133,728. Table-2 shows the breakdown of the three segments and the company. In fiscal year 2021 , the Company generated $4.7 billion in revenues and $650.9 million in net income attributable to Darling. The Company's stock price is $72.90 with 160.37 million shares outstanding. The five-year monthly beta is 1.23. The company has recently experienced decline in its Fuel Ingredients revenue due to high cost of diesel fuel and has contemplated to divest itself from this segment. The Fuel Ingredients revenue portion was about 9.10% of the total sales in 2021 . Table-1 shows Darling's net sales from fiscal year 2021, 2020 and 2019 continuing operations by operating segment were as follows (in thousands): On January 1, 2022, the Company had net income of $650,914 with the total asset of $6,133,728. Table- 2 shows the breakdown of the three segments and the company. Suppose you have been hired as a financial analyst at J.K. Kash Financial Services and have been assigned to value the company and each segment of the company. You have gathered the following information: \begin{tabular}{|l|l|l|} \hline Table-4 Consolidated Balance Sheets - USD (\$) \$ in Thousands & Jan. 01,2022 & Jan. 02,2021 \\ \hline Current assets: & & \\ \hline Cash and cash equivalents & $68,906 & $81,617 \\ \hline Restricted cash & 166 & 103 \\ \hline Accounts receivable, less allowance for bad debts of $8,196 at January 1, 2022 and $10,815 at January 2, 2021 & 469,092 & 405,387 \\ \hline Inventories & 457,465 & 405,922 \\ \hline Prepaid expenses & 53,711 & 47,793 \\ \hline Income taxes refundable & 1,075 & 3,883 \\ \hline Other current assets & 38,599 & 42,289 \\ \hline Total current assets & 1,089,014 & 986,994 \\ \hline Property, plant and equipment, net & 1,840,080 & 1,863,814 \\ \hline Intangible assets, net & 397,801 & 473,680 \\ \hline Goodwill & 1,219,116 & 1,260,240 \\ \hline Investment in unconsolidated subsidiaries & 1,349,247 & 804,682 \\ \hline Operating right-of-use assets, net & 155,464 & 146,563 \\ \hline Other assets & 66,795 & 60,682 \\ \hline Deferred income taxes & 16,211 & 16,676 \\ \hline Total assets & 6,133,728 & 5,613,331 \\ \hline Current liabilities: & & \\ \hline Current portion of long-term debt & 24,407 & 27,538 \\ \hline Accounts payable, principally trade & 307,118 & 255,340 \\ \hline Income taxes payable & 32,310 & 17,497 \\ \hline Operating lease liability, current & 38,168 & 39,459 \\ \hline Accrued expenses & 350,681 & 335,471 \\ \hline Total current liabilities & 752,684 & 675,305 \\ \hline Long-term debt, net of current portion & 1,438,974 & 1,480,531 \\ \hline Operating lease liability, non-current & 120,314 & 109,707 \\ \hline Other noncurrent liabilities & 111,029 & 117,371 \\ \hline Deferred income taxes & 362,942 & 276,208 \\ \hline Total liabilities & 2,785,943 & 2,659,122 \\ \hline Commitments and contingencies & & \\ \hline Stockholders' equity: & & \\ \hline Common stock, \$0.01 par value; 250,000,000 shares authorized, 171,734,603 and 169,880,238 shares issued at January 1, 2022 and January 2, 2021, respectively \end{tabular} \begin{tabular}{|l|l|l|} \hline Treasury stock, at cost; 10,942,599 and 7,679,849 shares at January 1, 2022 and January 2, 2021, respectively & (374,721) & (151,710) \\ \hline Accumulated other comprehensive loss & (321,690) & (252,433) \\ \hline Retained earnings & 2,347,838 & 1,696,924 \\ \hline Total Darling's stockholders' equity & 3,280,960 & 2,891,909 \\ \hline Noncontrolling interests & 66,825 & 62,300 \\ \hline Total stockholders' equity & 3,347,785 & 2,954,209 \\ \hline Total liabilities and stockholders' equity & $6,133,728 & $5,613,331 \\ \hline Common stock, par value (in USD \$ per share) & $0.01 & $0.01 \\ \hline Common stock, shares authorized (in shares) & 250,000,000 & 250,000,000 \\ \hline \end{tabular} \begin{tabular}{|l|l|c|l|c|c|} \hline Table-5 Companies Similar to Darling & Symbol & Price & beta & Book Value & Market Cap \\ \hline & \multicolumn{2}{|l|}{} & Debt (thousands) & Billions \\ \hline Sanderson Farms, Inc. & SAFM & 213.95 & 0.56 & $28,311 & 4.23 \\ \hline The Hain Celestial Group, Inc. & HAIN & 23.79 & 0.74 & $230,492 & 2.12 \\ \hline Conagra Brands, Inc. & CAG & 35.2 & 0.61 & $8,275,200 & 16.944 \\ \hline Ingredion Incorporated & INGR & 88.93 & 0.78 & $1,738,000 & 5.768 \\ \hline McCormick \& Company, Incorporated & MKC & 82.68 & 0.49 & $106,100 & 22.2 \\ \hline Post Holdings, Inc & Post & 82.9 & 0.56 & $6,107 & 5.046 \\ \hline Hormel Foods Corporation & HRL & 47.73 & 0.11 & $3,302,180 & 26.101 \\ \hline Darling Ingredients Inc & Dar & 57.6 & 1.11 & $1,463,381 & 9.347 \\ \hline \end{tabular} \begin{tabular}{|l|r|l|l|l|r|} \hline Table-6 Corporate Bond & Coupon & Maturity & Moody's & S\&P & price \\ \hline DAR4814991 & 5.25 & 4/15/2027 & Ba2 & BB+ & 95.28 \\ \hline DAR5422701 & 6.00 & 6/15/2030 & Ba3 & BB+ & 94.838 \\ \hline DAR5463168 & 6.00 & 6/15/2030 & Ba4 & BB+ & 96.985 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|} \hline table- 7 Business Segment & Asset Beta & Expected Growth Rate & Cost of Debt \\ \hline Food Ingredients & 0.8 & 5.00% & 4% \\ \hline Fuel Ingredients & 0.9 & 2.00% & 6% \\ \hline Feed Ingredients & 0.6 & 4.00% & 5% \\ \hline \end{tabular} In fiscal year 2021 , the Company generated $4.7 billion in revenues and $650.9 million in net income attributable to Darling. The Company's stock price is $72.90 with 160.37 million shares outstanding. The five-year monthly beta is 1.23. The company has recently experienced decline in its Fuel Ingredients revenue due to high cost of diesel fuel and has contemplated to divest itself from this segment. The Fuel Ingredients revenue portion was about 9.10% of the total sales in 2021 . Table-1 shows Darling's net sales from fiscal year 2021, 2020 and 2019 continuing operations by operating segment were as follows (in thousands): On January 1, 2022, the Company had net income of $650,914 with the total asset of $6,133,728. Table-2 shows the breakdown of the three segments and the company. In fiscal year 2021 , the Company generated $4.7 billion in revenues and $650.9 million in net income attributable to Darling. The Company's stock price is $72.90 with 160.37 million shares outstanding. The five-year monthly beta is 1.23. The company has recently experienced decline in its Fuel Ingredients revenue due to high cost of diesel fuel and has contemplated to divest itself from this segment. The Fuel Ingredients revenue portion was about 9.10% of the total sales in 2021 . Table-1 shows Darling's net sales from fiscal year 2021, 2020 and 2019 continuing operations by operating segment were as follows (in thousands): On January 1, 2022, the Company had net income of $650,914 with the total asset of $6,133,728. Table- 2 shows the breakdown of the three segments and the company. Suppose you have been hired as a financial analyst at J.K. Kash Financial Services and have been assigned to value the company and each segment of the company. You have gathered the following information: \begin{tabular}{|l|l|l|} \hline Table-4 Consolidated Balance Sheets - USD (\$) \$ in Thousands & Jan. 01,2022 & Jan. 02,2021 \\ \hline Current assets: & & \\ \hline Cash and cash equivalents & $68,906 & $81,617 \\ \hline Restricted cash & 166 & 103 \\ \hline Accounts receivable, less allowance for bad debts of $8,196 at January 1, 2022 and $10,815 at January 2, 2021 & 469,092 & 405,387 \\ \hline Inventories & 457,465 & 405,922 \\ \hline Prepaid expenses & 53,711 & 47,793 \\ \hline Income taxes refundable & 1,075 & 3,883 \\ \hline Other current assets & 38,599 & 42,289 \\ \hline Total current assets & 1,089,014 & 986,994 \\ \hline Property, plant and equipment, net & 1,840,080 & 1,863,814 \\ \hline Intangible assets, net & 397,801 & 473,680 \\ \hline Goodwill & 1,219,116 & 1,260,240 \\ \hline Investment in unconsolidated subsidiaries & 1,349,247 & 804,682 \\ \hline Operating right-of-use assets, net & 155,464 & 146,563 \\ \hline Other assets & 66,795 & 60,682 \\ \hline Deferred income taxes & 16,211 & 16,676 \\ \hline Total assets & 6,133,728 & 5,613,331 \\ \hline Current liabilities: & & \\ \hline Current portion of long-term debt & 24,407 & 27,538 \\ \hline Accounts payable, principally trade & 307,118 & 255,340 \\ \hline Income taxes payable & 32,310 & 17,497 \\ \hline Operating lease liability, current & 38,168 & 39,459 \\ \hline Accrued expenses & 350,681 & 335,471 \\ \hline Total current liabilities & 752,684 & 675,305 \\ \hline Long-term debt, net of current portion & 1,438,974 & 1,480,531 \\ \hline Operating lease liability, non-current & 120,314 & 109,707 \\ \hline Other noncurrent liabilities & 111,029 & 117,371 \\ \hline Deferred income taxes & 362,942 & 276,208 \\ \hline Total liabilities & 2,785,943 & 2,659,122 \\ \hline Commitments and contingencies & & \\ \hline Stockholders' equity: & & \\ \hline Common stock, \$0.01 par value; 250,000,000 shares authorized, 171,734,603 and 169,880,238 shares issued at January 1, 2022 and January 2, 2021, respectively \end{tabular} \begin{tabular}{|l|l|l|} \hline Treasury stock, at cost; 10,942,599 and 7,679,849 shares at January 1, 2022 and January 2, 2021, respectively & (374,721) & (151,710) \\ \hline Accumulated other comprehensive loss & (321,690) & (252,433) \\ \hline Retained earnings & 2,347,838 & 1,696,924 \\ \hline Total Darling's stockholders' equity & 3,280,960 & 2,891,909 \\ \hline Noncontrolling interests & 66,825 & 62,300 \\ \hline Total stockholders' equity & 3,347,785 & 2,954,209 \\ \hline Total liabilities and stockholders' equity & $6,133,728 & $5,613,331 \\ \hline Common stock, par value (in USD \$ per share) & $0.01 & $0.01 \\ \hline Common stock, shares authorized (in shares) & 250,000,000 & 250,000,000 \\ \hline \end{tabular} \begin{tabular}{|l|l|c|l|c|c|} \hline Table-5 Companies Similar to Darling & Symbol & Price & beta & Book Value & Market Cap \\ \hline & \multicolumn{2}{|l|}{} & Debt (thousands) & Billions \\ \hline Sanderson Farms, Inc. & SAFM & 213.95 & 0.56 & $28,311 & 4.23 \\ \hline The Hain Celestial Group, Inc. & HAIN & 23.79 & 0.74 & $230,492 & 2.12 \\ \hline Conagra Brands, Inc. & CAG & 35.2 & 0.61 & $8,275,200 & 16.944 \\ \hline Ingredion Incorporated & INGR & 88.93 & 0.78 & $1,738,000 & 5.768 \\ \hline McCormick \& Company, Incorporated & MKC & 82.68 & 0.49 & $106,100 & 22.2 \\ \hline Post Holdings, Inc & Post & 82.9 & 0.56 & $6,107 & 5.046 \\ \hline Hormel Foods Corporation & HRL & 47.73 & 0.11 & $3,302,180 & 26.101 \\ \hline Darling Ingredients Inc & Dar & 57.6 & 1.11 & $1,463,381 & 9.347 \\ \hline \end{tabular} \begin{tabular}{|l|r|l|l|l|r|} \hline Table-6 Corporate Bond & Coupon & Maturity & Moody's & S\&P & price \\ \hline DAR4814991 & 5.25 & 4/15/2027 & Ba2 & BB+ & 95.28 \\ \hline DAR5422701 & 6.00 & 6/15/2030 & Ba3 & BB+ & 94.838 \\ \hline DAR5463168 & 6.00 & 6/15/2030 & Ba4 & BB+ & 96.985 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|} \hline table- 7 Business Segment & Asset Beta & Expected Growth Rate & Cost of Debt \\ \hline Food Ingredients & 0.8 & 5.00% & 4% \\ \hline Fuel Ingredients & 0.9 & 2.00% & 6% \\ \hline Feed Ingredients & 0.6 & 4.00% & 5% \\ \hline \end{tabular}