Question
Consider recent financials for Ellie's Essentials LLC: Balance Sheet 2020 2019 Current Assets $11,249.00 $10,000.00 Net PPE $31,000.00 $30,000.00 Total Assets $42,249.00 $40,000.00 Current Liabilities
Consider recent financials for Ellie's Essentials LLC:
Balance Sheet
| 2020 | 2019 | |
|---|---|---|
| Current Assets | $11,249.00 | $10,000.00 |
| Net PPE | $31,000.00 | $30,000.00 |
| Total Assets | $42,249.00 | $40,000.00 |
| Current Liabilities | $8,798.00 | $8,000.00 |
| Long-term debt | $13,225.00 | $12,000.00 |
| Total Liabilities | $22,023.00 | $20,000.00 |
| Shareholder Equity | $20,226.00 | $20,000.00 |
| Liabilities and Equity | $42,249.00 | $40,000.00 |
| Income Statement | 2020 | 2019 |
|---|---|---|
| SALES | $11,000.00 | $10,000.00 |
| COGS | $4,400.00 | $4,000.00 |
| GROSS PROFIT | $6,600.00 | $6,000.00 |
| S&A | $1,100.00 | $1,000.00 |
| Depreciation | $550.00 | $500.00 |
| EBIT | $4,950.00 | $4,500.00 |
| INTEREST | $1,272.00 | $1,200.00 |
| EBT | $3,678.00 | $3,300.00 |
| TAXES (38.00%) | $1,397.64 | $1,254.00 |
| NET INCOME | $2,280.36 | $2,046.00 |
Going forward, analysts have forecasted the following free cash flows: $2,650.00 in 2021, and $2,600.00 in 2022. After that point, analysts expect free cash flows to grow at 4.00%. The firm has no short-term debt or preferred stock, and there are 1,000 shares outstanding. The firm's cost of capital is 10.00%.
Estimate the firms price per share using the discounted cash flow model.
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Financial Markets And Institutions
Authors: Frederic S. Mishkin, Stanley G. Eakins
7th Edition
013213683X, 978-0132136839
