Exercise 4 (12 marks) As a financial analyst, you mission is to value the share of your XYZ Company. To do so, you should compute the future Free Cash Flow (FCF) of XYZ In 31 December 2020, the financial statements of the Company are presented as follows: Balance sheet Assets 2020 Liabilities and Owner's 2020 equity Current assets Current liabilities 2400 Cash 1400 Long-term debt (LTD) 9.600 Non-cash Current assets 5,500 stock 14,500 Fixed assets at cost 33.100 Accumulated retained 4.500 earnings Accumulated depreciation (9.000) Net fixed assets 24,100 31,000 Total assets Total liabilities & owner's 31,000 equity Income statements 2020 30,000 Sales Cost of goods sold Depreciation Interest paid (15,000) (3,000) (960) Interest earned on cash 192 Taxable income Taxes 11,232 (4,4928) 6,739.2 Net Income Further information: The Company will repay $3,200 of this debt in each of the next three years. Once the debt is fully repaid, XYZ intends to stay debt free. The company does not intend to issue new shares or repurchase shares over the next five years (2021 to 2025). The cost of capital is 10%. The long-term FCF growth rate is 5%. The FCFs occur in midyear. Sales growth 30% Current assets/Sales 15% Current liabilities/Sales 7% Net fixed assets/Sales 65% SOX Costs of goods sold/Sales Depreciation rate 10% Interest rate on debt TON Interest earned on cash balances 89 Tax rate 40% Dividend payout ratio 60 1) What is the price per share? 2) What is the stock price for different growth rates of sales (D%:55: 0% 10% 12% 15% 20% 35%)? What is your recommendation Why