FINANCIAL STATEMENTS, CASH FLOW, AND TAXES.

Below is the 2015 and 2016 Balance Sheets for Laiho Industries (in the Thousands of Dollars). Please answer the following questions and PLEASE SHOW ALL OF YOUR WORK AND ALL OF THE FORMULAS THAT YOU USED TO ARRIVE AT YOUR ANSWERS:

a. Sales for 2016 were $455,150,000, and EBITDA was 15% of sales. Furthermore, depreciation and amortization were 11% of net fixed assets, interest was $8,575,000, the corporate tax rate was 40%, and Laiho pays 40% of its net income as dividends. Given this information, construct the firms 2016 income statement.

b. Construct the statement of stockholders equity for the year ending December 31, 2016, and the 2016 statement of cash flows.

c. Calculate 2015 and 2016 net operating working capital (NOWC) and 2016 free cash flow (FCF).

d. If Laiho increased its dividend payout ratio, what effect would this have on corporate taxes paid? What effect would this have on taxes paid by the companys shareholders?

e. Assume that the firms after-tax cost of capital is 10.5%. What is the firms 2016 EVA?

f. Assume that the firms stock price is $22 per share and that at year-end 2016 the firm has 10 million shares outstanding. What is the firms MVA at year-end 2016?

Laiho Industries 2015 & 2016 Balance Sheets (IN THE THOUSANDS OF DOLLARS)
	2016	2015
Cash	102,850	89,725
Accounts receivable	103,365	85,527
Inventories	38,444	34,982
Total current assets	244,659	210,234
Net fixed assets	67,165	42,436
Total assets	311,824	252,670
Accounts payable	30,761	23,109
Accruals	30,477	22,656
Notes payable	16,717	14,217
Total current liabilities	77,955	59,982
Long-term debt	76,264	63,914
Total liabilities	154,219	123,896
Common stock	100,000	90,000
Retained earnings	57,605	38,774
Total common equity	157,605	128,774
Total liabilities and equity	311,824	252,670