Question
Given the following information about a company, perform a forecast. Sales in Recent Year (year 0): $25.00 Million Sales growth: Sales growth each year for
Given the following information about a company, perform a forecast.
Sales in Recent Year (year 0): $25.00 Million
Sales growth:
Sales growth each year for next 4 years: 8%
Sales growth after year 4: 3%
Operation Margins: 24%
Tax Rate: 27%
Market Value of Debt: $15.00 Million
Pre-tax cost of debt: 5.25%
Number of shares: 3.00 Million
Market value of equity: 40.00 million
Cost of equity: 12.00%
Percentage of NOPAT that must be reinvested:
Reinvestment rate years 1-4: 30%
Reinvestment rate after year 4: 20%
The net operating profit in year 1 is:
The FCF to the firm in year 4 is:
The enterprise value of the firm is:
Answer:
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