Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Hasbro Inc has the following projected sales, costs, net investment, and free cash flow in millions. The anticipated growth rate in free cash flows after
Hasbro Inc has the following projected sales, costs, net investment, and free cash flow in millions. The anticipated growth rate in free cash flows after year 6 is 2% per year forever. There are 139 million shares outstanding, and investors require a return of 8% on the company's stock and a comparable P/E ratio of 15. Using the constant growth model to find the terminal value, then calculate the company stock price. (Round to 2 decimals)
($ in millions) | 1 | 2 | 3 | 4 | 5 | 6 |
Sales | 5850 | 6142 | 6450 | 6775 | 7113 | 7450 |
Costs | 5000 | 5250 | 5512 | 5780 | 6069 | 6370 |
Taxes | 300 | 315 | 331 | 345 | 362 | 380 |
OCF (net income) | 550 | 577 | 607 | 650 | 682 | 700 |
Net investment | 100 | 105 | 110 | 116 | 120 | 126 |
FCF | 450 | 472 | 497 | 534 | 562 | 574 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started