Question
Below you will find the Stiller Corporation financials for the year 2018 and 2019. Table 7 Stiller Corporation Comparative Balance Sheet (2018-2019) in USD #
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Below you will find the Stiller Corporation financials for the year 2018 and 2019.
Table 7
Stiller Corporation Comparative Balance Sheet (2018-2019) in USD
# | TEXT | 2019 | 2018 |
1 | Cash | $157,000 | $78,000 |
2 | Accounts Receivable | 180,000 | 185,000 |
3 | Investments | 52,000 | 74,000 |
4 | Equipment | 298,000 | 240,000 |
5 | Less accumulated depreciation | (106,000) | (89,000) |
6 | Current liabilities | 134,000 | 151,000 |
7 | Common stock | 160,000 | 160,000 |
8 | Retained earnings | 287,000 | 177,000 |
Additional information:
Investments were sold at a loss (not extraordinary) of $7,000; no equipment was sold; cash dividends paid were $50,000; and net income was $160,000.
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Prepare a statement of cash flows for 2019 for Stiller Corporation.
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Calculate the companys free cash flow.
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Assuming the 2019 cash flows grow at the rates of 20%, 18%, 15% in 2020, 2021, and 2022 respectively, and then stabilize at 10%, calculate the current value of Stiller Corporation. Assume the companys weighted average cost of capital is 12%.
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