Question
Bello Plc has just released its financial results for 2018. It achieved sales of 200m, and forecast that these were expected to grow at 8%
Bello Plc has just released its financial results for 2018. It achieved sales of 200m, and forecast that these were expected to grow at 8% per year.
Bello Plc currently has cash on deposit of 32m, debt of 12m and has issued 15m shares. It is taxed at a rate of 25%.
You are provided with the following estimates:
EBIT is 7% of sales
Increases in both net investment and in net working capital will be 8% of any increase in sales.
The firms WACC is expected to be 12%.
Using a free cash flow approach, calculate a fair price for Bello Plc shares.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Crisis Risk And Stability In Financial Markets
Authors: Juan Fernández De Guevara Radoselovics , José Pastor Monsálvez
1st Edition
1137001828, 978-1137001825
