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Case S-54-Stock Vaiuation Directed Case S-5A ALOFT CATERING CORPORATION Stock Valuation Aloft Catering Corp. Is a global provider of full range catering services to the

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Case S-54-Stock Vaiuation Directed Case S-5A ALOFT CATERING CORPORATION Stock Valuation Aloft Catering Corp. Is a global provider of full range catering services to the airline industry? They provide a full range of food and beverage options to major global airlines and airport lounges around the world. They have grown substantially over the last decade as a pioneer in providing specialized meal service for travelers with multiple needs. Alofs's stock currently trades on the NASDAQ stock exchange at $85 per share. You are interested in investing in Aloft stock and would like to determine the intrinsic value. Towards this end, you have collected relevant financial information for 2018, and other information for their future growth. This information is presented in Table I. The firm does not currently pay dividends, but their CFO has announced they will most likely begin paying dividends in two years' time (as of year-end 2020). Your task is to complete a report in which you assess the intrinsic value of Aloft Catering's stock in year-end 2018 using as many methods as you have information for, and providing some recommendation for whether or not you should invest in the stock as of year-end 2018. Use the questions below to analyze and structure your report. QUESTIONS S. What is the intrinsic value of aloft stock as of year-end 2018 using the Discounted Dividend? 6. What is average intrinsic value of Aloft stock using DCF method, Dividend Discount 7. If you expect the current market price of the stock to continue into year-end 2018, is the Method? method, and multiples method? stock overvalued, undervalued, or correctly valued? Should you buy the stock? aBbCck AaBbCcD AaBbC AaBbCcl T Normal No Spac. Heading1 Heading2Title ubtitle Subtle Em... Emphasis Intense E 9-1 Styles 8. Provide some sensitivity analysis on how the intrinsic valse of the stock would change if the growth in net income from 2019-2022 were to dange by about t2%, and faction of capex and NowC financed with debt were to change by about t5% Estimatetheiatriasie value Under each of the following sceaarios. Discuss your findings Growth rate in Net Income Fraction financed with Debt 33% 40% 45% 7% 9% 11% TABLE I Selected Data Related to Aloft Stock $6,470,000 $300,000 $1,700,000 0.95 21.0% 3,210,000 9.0% S0% 4.0% 6.0% 45% 40% 53.40 2013 Net laco me 2018 Depreciation 2018 Capex plas Operating Working Capitsl Beta coefficient Tax rate Shares oatstanding Net Income growth, 2019-2022 Capex plus NOWC grouth, 2019-2022 Depreciation growth, 2019-2022 Constant growth in FCFE beyond 2022 Risk-free tate Market risk premiun First deridend expected in year-end 2020 Grouth in dividend in 2021 and 2022 Constast growth an dividend beyond 2022 Firm plass to finance 40% of capex and Nove by sang lose-1enndebt 'aluarion Multiples (hazed on rapidly grow t Valae an a mmultiple of FCFE Value as a maltiple of set income caterine hoxpitalin fim 40.0 35.0

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