Example.docx d BMC Example.docx (19.3 KB) Page of 3 0 - ZOOM + MVE 5 45 * in billions Cash PPS DEBT EPS IBM 110 17 15 120 47 6.2 Hewlett-Packard (HP) 36 22 CA Technologies 1.25 Using IBM as a comparable firm, provide a valuation of the BMC Software's equity per share basis based on EV/EBITDA. (Note: base your answer on the 2017 financial since 2018 numbers are not known yet) a. 23.17 per share b. 26.60 per share c. 29.17 per share d. 32.60 per share e. None of the above 8. Using HP as a comparable firm, provide a valuation of the BMC Software's equity per share basis based on PPS/EPS (P/E). (Note: base your answer on the 2017 financial since 2018 numbers are not known yet) a. $6.67 per share b. $13.48 per share o e og NOTE THE FOLLOWING IS APPLICABLE FOR ALL BMC SOFTWARE QUESTION In 2017, BMC Software generated $465M of operating income (earnings before interest and taxes) and $295M of net income from $2,200M of sales. Over the next two years (2018 and 2019), the firm is projecting 10% growth in operating income and 5% growth in depreciation expense. Beginning in 2020, BMC estimates that free cash flows will grow 2%. Assume the firm's effective tax rate is 30%, weighted average cost of capital is 9%, and number of shares outstanding is 146M. Depreciation expense for 2017 was $105M while capital expenditures were $55M. Capital expenditures are expected to remain constant over the next 5 years. BMC expects working capital needs to increase by $20M per year. Lastly, the firm has $250M in cash and cash equilavents and $750M of interest bearing debt