Excel Online Structured Activity: Corporate valuation

Dantzler Corporation is a fast$-$growing supplier of office products. Analysts project the following free cash flows $($FCFs$)$ during the next $3$ years, after which FCF is expected to grow at a constant $5\%$ rate. Dantzler's WACC is $12\%.$

Year $0123$

$........................................................$

FCF $($$ millions$).......................................................$

$-$ $$13$ $$12$ $$52$

The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below.

Open spreadsheet

What is Dantzler's horizon, or continuing, value? $($Hint: Find the value of all free cash flows beyond Year $3$ discounted back to Year $3.)$ Round your answer to two decimal places. Enter your answer in millions. For example, an answer of $$13,550,000$ should be entered as $13\mathrm{.}55.$

$ fill in the blank $2$

million

What is the firm's value today? Round your answer to two decimal places. Enter your answer in millions. For example, an answer of $$13,550,000$ should be entered as $13\mathrm{.}55.$ Do not round your intermediate calculations.

$ fill in the blank $3$

million

Suppose Dantzler has $$27$ million of debt and $27$ million shares of stock outstanding. What is your estimate of the current price per share? Round your answer to two decimal places. Write out your answer completely. For example, $0\mathrm{.}00025$ million should be entered as $250.$

$ fill in the blank $4$ Corporate valuation

Dollars$/$shares in millions

FCF$1-$$$13\mathrm{.}00$

FCF$2$ $$12\mathrm{.}00$

FCF$3$ $$52\mathrm{.}00$

Constant growth rate, gn $5\mathrm{.}00\%$

WACC $12\mathrm{.}00\%$

Market value of debt $$27\mathrm{.}00$

Common shares outstanding $27$

$01234$

FCFs $-$$$13\mathrm{.}00$ $$12\mathrm{.}00$ $$52\mathrm{.}00$

Horizon value

Total FCFs

PV of FCFs to investors

Firm value today

Market value of equity, MVEquity

Price per share, P$0$

Formulas

$01234$

FCFs $-$$$13\mathrm{.}00$ $$12\mathrm{.}00$ $$52\mathrm{.}00$ #N$/$A

Horizon value #N$/$A

Total FCFs #N$/$A #N$/$A #N$/$A

PV of FCFs to investors #N$/$A #N$/$A #N$/$A

Firm value today #N$/$A

Market value of equity, MVEquity #N$/$A

Price per share, P$0$ #N$/$A