Based on the assumptions listed below, please compute the DCF per-share value of the equity of Regards Inc. and place your answer in the space provided below.

DCF per-share equity value of Common stock = $

(Your score on Question I is based on the percentage deviation between the correct answer and your answer that is entered above.

DCF Assumptions for Regards Inc a) Express sales, etc. in millions (so that $1 billion is expressed as $1,000 in the spreadsheet) and use 2 decimals, except use 4 decimals for the discount factor (which equals 1/WACC), to replicate my numbers exactly. However, normal rounding variation should not affect your score. b) Appraisal date is January 1, 2021, and Forecast Period is 2021 through 2025 inclusive. Sales forecast for 2021 are $100 million, and Sales (nominal) are projected to increase 20% annually in the Forecast Period. EBIT margin is 80% in the Forecast Period. c) Sales growth (nominal) in the Perpetuity Period is projected to be 7% annually. EBIT margin in the Perpetuity Period is projected to be 50%. The tax rate is 40% for all years. d) Interest expense is projected to be $7 million annually for all years in the Forecast Period, and interest expense is projected to increase to $10 million annually in the Perpetuity Period. e) CAPX is projected to be $20 million in 2021 and is projected to grow 20% annually through 2015. Depreciation is projected to be $20 million in 2011 and is projected to increase by $4 million annually throughout the Forecast Period. f) For the historical year 2010, Sales are $80 million. As of 12/31/10, Accounts Receivables are $4 million. Inventory is $4 million, and Accounts Payables are $6 million. g) The Company has legal liabilities of $60 million and an over-funded pension fund benefit of $40 million, long-term debt is $99 million, and Cash is zero, all figures as of 12/31/10. h) Expected inflation is 3% annually in all years. Risk-free rate is 4.0%, risk premium is 6.0%, and small-cap risk premium is 1.7%, all nominal. Plowback ratio is 7% in 2015, the last year before the Perpetuity Period. i) Cost of debt capital is 7% (nominal, before accounting for tax benefits) and optimal leverage is 20% of the market value of equity plus debt. Assume that equity beta is 2.0 when the optimal leverage ratio is 20%. Assume that the nominal return on investment in the Perpetuity Period is 23%. i) The Company has 8 million common shares outstanding. It also has 4.5 million management options outstanding, each exercisable into 1 share of common stock for an exercise price of $40 per share. Each option has a black-scholes value of $30. You are asked to use the Black-Scholes method to account for management options. DCF Assumptions for Regards Inc a) Express sales, etc. in millions (so that $1 billion is expressed as $1,000 in the spreadsheet) and use 2 decimals, except use 4 decimals for the discount factor (which equals 1/WACC), to replicate my numbers exactly. However, normal rounding variation should not affect your score. b) Appraisal date is January 1, 2021, and Forecast Period is 2021 through 2025 inclusive. Sales forecast for 2021 are $100 million, and Sales (nominal) are projected to increase 20% annually in the Forecast Period. EBIT margin is 80% in the Forecast Period. c) Sales growth (nominal) in the Perpetuity Period is projected to be 7% annually. EBIT margin in the Perpetuity Period is projected to be 50%. The tax rate is 40% for all years. d) Interest expense is projected to be $7 million annually for all years in the Forecast Period, and interest expense is projected to increase to $10 million annually in the Perpetuity Period. e) CAPX is projected to be $20 million in 2021 and is projected to grow 20% annually through 2015. Depreciation is projected to be $20 million in 2011 and is projected to increase by $4 million annually throughout the Forecast Period. f) For the historical year 2010, Sales are $80 million. As of 12/31/10, Accounts Receivables are $4 million. Inventory is $4 million, and Accounts Payables are $6 million. g) The Company has legal liabilities of $60 million and an over-funded pension fund benefit of $40 million, long-term debt is $99 million, and Cash is zero, all figures as of 12/31/10. h) Expected inflation is 3% annually in all years. Risk-free rate is 4.0%, risk premium is 6.0%, and small-cap risk premium is 1.7%, all nominal. Plowback ratio is 7% in 2015, the last year before the Perpetuity Period. i) Cost of debt capital is 7% (nominal, before accounting for tax benefits) and optimal leverage is 20% of the market value of equity plus debt. Assume that equity beta is 2.0 when the optimal leverage ratio is 20%. Assume that the nominal return on investment in the Perpetuity Period is 23%. i) The Company has 8 million common shares outstanding. It also has 4.5 million management options outstanding, each exercisable into 1 share of common stock for an exercise price of $40 per share. Each option has a black-scholes value of $30. You are asked to use the Black-Scholes method to account for management options