Question
Find FCF, W d, W E, r d , r E, and WACC below.Year 4 FCF has already been calculated ($5,824,400). Synthetic Appendix Reinsertion Division
Find FCF, Wd, WE, rd ,rE, and WACC below.Year 4 FCF has already been calculated ($5,824,400).
Synthetic Appendix Reinsertion Division Projected
Time | 0 | 1 | 2 | 3 | 4 |
Forecast Sales | $0 | $23,500,000 | $24,500,000 | $25,500,000 | $26,500,000 |
COGS | $0 | $14,100,000 | $14,700,000 | $15,300,000 | $15,900,000 |
Gross Profit | $0 | $9,400,000 | $9,800,000 | $10,200,000 | $10,600,000 |
SG&A | $0 | $3,760,000 | $3,920,000 | $4,080,000 | $4,240,000 |
EBITDA | $0 | $5,640,000 | $5,880,000 | $6,120,000 | $6,360,000 |
Depreciation | -$20,000,000 | $0 | $0 | $0 | $0 |
EBIT | -$20,000,000 | $5,640,000 | $5,880,000 | $6,120,000 | $6,360,000 |
Taxes | -$4,200,000 | $1,184,400 | $1,234,800 | $1,285,200 | $1,335,600 |
EBIT (1-T) | -$15,800,000 | $4,455,600 | $4,645,200 | $4,834,800 | $5,024,400 |
+Depreciation | $20,000,000 | $0 | $0 | $0 | $0 |
CapEx | -$20,000,000 | $0 | $0 | $0 | $200,000 |
Chg in NOWC | -$600,000 | $0 | $0 | $0 | $600,000 |
FCF | -$??,???,??? | $?,???,??? | $?,???,??? | $?,???,??? | $5,824,400 |
ADDITIONAL INFORMATION:
Stock price = $45
# of shares outstanding = 50,000,000
BV ~ MV of interest-bearing debt = $750,000,000
10-year T-note = 3%
Yield Spread = 280 basis points
Tax rate = 21%
Beta = 1.67
Market (Equity) Risk Premium = 5%
Assume capital structure percentages are optimal and will remain the same
COMPLETE THE FOLLOWING:
Wd = 0.??
WE = 0.??
rd = ?.??%
rE = ?.??%
WACC = ?.???%
Synthetic Appendix Reinsertion Division
NPV $???,???
IRR ?.??%
MIRR 8.33%
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