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Consider the following abbreviated financial statements for Weston Mechan: Weston Mechan 2014 and 2015 Partial Balance Sheets Assets Liabilities and Owners Equity 2014 2015 2014

Consider the following abbreviated financial statements for Weston Mechan:

Weston Mechan 2014 and 2015 Partial Balance Sheets

Assets

Liabilities and Owners Equity

2014

2015

2014

2015

Current assets

$

952

$

1,020

Current liabilities

$

385

$

407

Net fixed assets

3,997

4,612

Long-term debt

2,038

2,212

Equity

2,526

3,013

Weston Mechan 2015 Income Statement

Sales

$

12,625

Costs

6,025

Depreciation

1,090

Interest paid

190

The tax rate is 35%. Long term debt trades at 200% of par. The firm has 300 shares outstanding. Free Cash Flow to the Firm and the Free Cash Flow to Equity are not expected to grow. The weighted average cost of capital is 12%. The cost of equity is 16%. Construct the income statement. Then answer the following questions:

A). What is the stock price per share using the discounted FCFF valuation? $_______

B). What is the Free Cash Flow to Equity for 2015?

C). What is the stock price per share using the discounted FCFE valuation?

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