dpter 18 Financial Modeling and Pro Forma Analysis 581 and project investment and financing will be adjusted as ecrbed in Problem 13), you project 14 Under the assumption that KMS's market share will iny13), by 0.25% per year ( the following depreciation: 2013 2014 Depreciation 5,4925,4437,338 2015 201 2017 2018 7,398 7,459 7,513 7,561 Using this information, project net income through 2018 (that is, reproduce Table 18.8 under the new assumptions). 15. Assuming thatKMS's market share will increase by 0.25% per year (implying that the investment, financing, and depreciation will be adjusted as described in Prob- lems 13 and 14), and that the working capital assumptions used in the chapter still hold, calculate KMS's working capital requirements through 2018 (that is, reproduce Table 18.9 under the new assumptions). Growth and Firm Value 16. Using the information in the following table, calculate this company's: Net Income Beginning Total Assets Beginning Stockholders' Equity Payout Ratio 50,000 400,000 250,000 0% a. Internal growth rate. b. Sustainable growth rate. c. Sustainable growth rate if it pays out 40% of its net income as a dividend. 17. Did KMS's expansion plan call for it to grow slower or faster than its sustainable growth rate? Your firm has an ROE of 12%, a payout ratio of25% $600,000ofsto and $400,000 of debt. If you grow at your sustainable growth rate this year, how much additional debt will you need to issue? 18. holders' equity, 19. IZAX, Co. had the following items on its balance sheet at the beginning of the year: Liabilities and Equity 50,000Debt 350,000 Equity 100,000 300,000 Its net income this year is $20,000 and it pays di at its internal growth rate, what is its new D/E ratio? eds of $5,000. If its assets grew Valuing the Expansion 20. Forecast KMS's s free cash flows (reproduce Table 18.13), assuming KMS's market share will increase by 0.25% per year, investment, financing 21. Calculate the continuatio 22. Assuming a cost and depreciation will rdingly, and working capital will be as you projected in Problem 15). n value of KMS using your reproduction of Table 18.8 from blem 14, and assuming an EBITDA multiple of 8.5 of capital of 10%, compute the value of KMS under the 0.25% growth