Guadalajara & Blings is a firm that makes Mexican food and princess tiaras. It is a competitor of the firm in the previous problem, so it will have the same cost of capital and the same long-term growth rate (in fact, your keen analysis should notice something fishy its balance sheet looks very similar to its competitor). For the sake of simplicity, we will also assume that it has the same cost of equity (although in reality, this will not be the case if it has a different debt ratio). This firm has 500,000 shares of stock outstanding. The accounting statement is in thousands of dollars on the following pages. Assuming that the projections are correct and that there are no asset sales other than those at book value, compute the stock price per share using:

a) the WACC/FCF method

b) the Flow-to-Equity method

Guadalajara & Blings Financial Statement Projections:

Income Statement	Year 0	1	2	3	4	5	6	7
Total Revenue	17,300	19,030	19,982	21,980	23,738	26,112	26,112	28,723
Cost of Goods Sold	7,000	7,700	8,085	8,894	9,783	10,761	11,837	13,021
SG & A	3,600	3,960	3,960	4,356	4,574	5,031	5,534	6,088
Depreciation	3,250	3,575	3,933	4,326	4,758	5,234	5,758	6,333
Earnings Before Interest and Taxes (EBIT)	3,450	3,795	4,004	4,404	4,623	5,085	2,983	3,281
Interest Expense	680	690	700	710	720	730	740	750
Taxable Income	2,770	3,105	3,304	3,694	3,903	4,355	2,243	2,531
Tax Expense	969.5	1087	1156	1293	1366	1524	785	886
Net Income (Loss)	1,801	2,018	2,148	2,401	2,537	2,831	1,458	1,645
Dividends Paid	450	490	530	610	790	870	950	1030