Exercise 4 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 2030 Owner's equity Current anses Current Babilities 1.400 Ley dem debe 9.00 LTD) Non-cash s 500 lock 14.500 Currents Fised assets 33.160cm 1.500 post Accued 9.000 depreciation Net fired assets 24,100 1.000 Total liabilities 1.000 & owner's equity Income statements 2020 30.000 Cost of goods sold 05.000 Depreciation 13,000 Interest paid 1960) Interest comedo 192 Taxable income Taxes Net Income 11,212 14.492 4.729.2 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. alesh Current Sales 154 Kartont kahilities Sale % Net fired act Sales 65% Kosts of goods sold Sales Depreciation rate 10% Interest rated 109. Interest came on cash Falancer Taxide Dividend payout ratio 1) What is the price per share? 2) What is the stock price for different growth rates of sales (0%;5%;8% 10%, 12%: 15%, 20%, 25%: 30% 35%)? What is your recommendation? Why? Exercise 4 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 2030 Owner's equity Current anses Current Babilities 1.400 Ley dem debe 9.00 LTD) Non-cash s 500 lock 14.500 Currents Fised assets 33.160cm 1.500 post Accued 9.000 depreciation Net fired assets 24,100 1.000 Total liabilities 1.000 & owner's equity Income statements 2020 30.000 Cost of goods sold 05.000 Depreciation 13,000 Interest paid 1960) Interest comedo 192 Taxable income Taxes Net Income 11,212 14.492 4.729.2 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. alesh Current Sales 154 Kartont kahilities Sale % Net fired act Sales 65% Kosts of goods sold Sales Depreciation rate 10% Interest rated 109. Interest came on cash Falancer Taxide Dividend payout ratio 1) What is the price per share? 2) What is the stock price for different growth rates of sales (0%;5%;8% 10%, 12%: 15%, 20%, 25%: 30% 35%)? What is your recommendation? Why
