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Hello, I need help on this case. Thank you! 3-19 FINANCIAL STATEMENTS, CASH FLOW, AND TAXES Laiho Industries's 2017 and 2018 balance sheets (in thousands
Hello, I need help on this case. Thank you!
3-19 FINANCIAL STATEMENTS, CASH FLOW, AND TAXES Laiho Industries's 2017 and 2018 balance sheets (in thousands of dollars) are shown. a. Sales for 2018 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 firm's 2018 income statement. b. Construct the statement of stockholders' equity for the year ending December 31, 2018, and the 2018 statement of cash flows. c. Calculate 2017 and 2018 net operating working capital (NOWC) and 2018 free cash flow (FCF). Assume the firm has no excess cash. 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 company's shareholders? e. Assume that the firm's after-tax cost of capital is 10.5\%. What is the firm's 2018 EVA? f. Assume that the firm's stock price is $22 per share and that at year-end 2018 the firm has 10 million shares outstanding. What is the firm's MVA at year-end 2018? 3-19 FINANCIAL STATEMENTS, CASH FLOW, AND TAXES Laiho Industries's 2017 and 2018 balance sheets (in thousands of dollars) are shown. a. Sales for 2018 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 firm's 2018 income statement. b. Construct the statement of stockholders' equity for the year ending December 31, 2018, and the 2018 statement of cash flows. c. Calculate 2017 and 2018 net operating working capital (NOWC) and 2018 free cash flow (FCF). Assume the firm has no excess cash. 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 company's shareholders? e. Assume that the firm's after-tax cost of capital is 10.5\%. What is the firm's 2018 EVA? f. Assume that the firm's stock price is $22 per share and that at year-end 2018 the firm has 10 million shares outstanding. What is the firm's MVA at year-end 2018Step by Step Solution
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