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Complete DCF valuation using the provided information and assumptions. Management Projections and Assumptions for Synergy Corporation as of 1/1/2020 Item/Year 2020 2021 2022 2023 2024

Complete DCF valuation using the provided information and assumptions.

Management Projections and Assumptions for Synergy Corporation as of 1/1/2020

Item/Year

2020

2021

2022

2023

2024

Sales (10% annual growth 2020-2024)

$ 100.00

$ 110.00

$ 121.00

$ 133.10

$ 146.41

CAPX ($mm)

$ 10.00

$ -

$ 15.00

$ 15.00

$ -

Depreciation ($mm)

$ 5.00

$ 6.00

$ 6.01

$ 8.00

$ 10.00

OTHER ASSUMPTIONS

Sales for 2019 are $80 million

Accounts Rec 12/31/2019 is $15 million

Inventory 12/31/2019 is $10 million

Accounts Pay 12/31/2019 is $5 million

Optimal Leverage ratio is 40%

Equity Beta is 1.00

Cost of Debt before tax savings is 6.66%

Risk-free rate is 4%

Equity Risk Premium is 6%

Add-on Size premium is 4%

Nominal Perpetuity Growth rate is 6%

Expected inflation rate is 3%

Nominal ROI in Perpetuity is 18%

Number of shares is 12 million

Cash as of 12/31/2019 is $33 mm

Tax rate is 40% all years

Under-funded Pension Liability $87.12 mm

Face Value of Debt $200mm

Stnd-alone

Synergy

EBIT margin thru 2024

50.0%

55.1%

EBIT margin after 12/31/2024

40.0%

44.0%

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