Company Valuation

BOAC Airline Supply is trading at $15/share but you think that price may not be right. You have the following data and you want to use it to calculate its share price:

Calculate the per-share price and run sensitivities for growth rates of 3.0%, 3.5%, and 4% as well as discount rates of 8%, 9%, and 10%. Put these in a matrix.

IMPORTANT: SHOW FORMULAS USED TO CALCULATE

Gross Sales (year 1) COGS General & Admin Annual Sales Growth Rate Advertising, Promotion & Selling Yearly Inflation for non-COGS expenses Tax Rate Discount Rate Cash Balance Debt Shares o/s $114M 57% of sales $3.3M 3.2% $5.5M 3.1% 21% 8.5% $3.3M $5.2M 40M Cash Flow Adjustment Working Capital Capital Expenditures Year 1 (2.1) (1.5) Year 2 (2.2) (1.6) Year 3 (2.3) (1.9) Year 4 (2.4) (2.2) Year 5 (2.4) (2.4) Year 6 (2.4) (3.0) B Yrs. 1-5 A 1 2 3 Sales growth 4. Costs (% of sales): 5 Cost of Goods Sold 6 Advert., Prom., & Selling 7 General & Administrative 8 Rates: 9 Tax 10 Discount 12 11 Inflation Results 13 PV of NCF (incl. TV) 14 + Cash 15 - Debt 16 Total Equity (MS) 17 - # of shares outstanding (M) 18 - Price/share ($) Gross Sales (year 1) COGS General & Admin Annual Sales Growth Rate Advertising, Promotion & Selling Yearly Inflation for non-COGS expenses Tax Rate Discount Rate Cash Balance Debt Shares o/s $114M 57% of sales $3.3M 3.2% $5.5M 3.1% 21% 8.5% $3.3M $5.2M 40M Cash Flow Adjustment Working Capital Capital Expenditures Year 1 (2.1) (1.5) Year 2 (2.2) (1.6) Year 3 (2.3) (1.9) Year 4 (2.4) (2.2) Year 5 (2.4) (2.4) Year 6 (2.4) (3.0) B Yrs. 1-5 A 1 2 3 Sales growth 4. Costs (% of sales): 5 Cost of Goods Sold 6 Advert., Prom., & Selling 7 General & Administrative 8 Rates: 9 Tax 10 Discount 12 11 Inflation Results 13 PV of NCF (incl. TV) 14 + Cash 15 - Debt 16 Total Equity (MS) 17 - # of shares outstanding (M) 18 - Price/share ($)