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I need the answer for c and d Portogee Inc's 2021 financial statements are shown below. Portogee Inc: balance sheet as of December 31, 2021
I need the answer for c and d
Portogee Inc's 2021 financial statements are shown below. Portogee Inc: balance sheet as of December 31, 2021 (Thousands of Dollars) Portogee Inc: Income statement for December 31, 2021 (Thousands of Dollars) a. Assume that the company was operating at full capacity in 2021 with regard to all items except fixed assets, which in 2021 were being utilized to only 90% of capacity. By what percentage could 2022 sales increase over 2021 sales without the need for an increase in fixed assets b. Suppose that in 2022 , sales increase by 25% over 2021 sales. The firm expects to maintain its 2021 dividend payout ratio and if its 2022 forecasted sales is greater than the capacity sales, it need to add more fixed assets. The firm believes that its current assets and operating liabilities should grow at the same rate as sales. However, it would like to reduce its operating costs/sales ratio to 80.0%. The firm will raise all additional fund needed as notes payable at the end of 2022 , and it forecasts that the interest rate on all of its interest-bearing debt is 12%. Portogee Inc has a tax rate of 40%. Construct the 2022 forecasted income statement and balance sheet for Portogee using all information here and from question a above. How much additional external capital (AFN) will be required? (Hints: Base the forecasted interest expense on the amount of debt at the beginning of the year, because any new debt is added at the end of the year.) c. Forecast the 2022 free cash flow and the 2022 dividend per share (Note: present your calculations). d. Assume that it is now January 1,2022 , the forecasted FCF for 2022 is $2,900 thousand, and this FCF is expected to grow at 27% for 2023 and 25% for 2024 , afterward FCFs are expected to grow at a constant rate of 6% indefinitely. The company's WACC is 12.4%, and stockholders require a return of 14.5% on Portogee's stock. Calculate the firm value and the stock price today using the corporate value model. e. Assume that it is now January 1, 2022, the forecasted 2022 dividend per share (DPS) is $1.9, and this DPS is expected to grow at 16% for 2023 and 8% for 2024 , afterward dividends are expected to grow at a constant rate of 6% indefinitely. The company's WACC is 12.4%, and stockholders require a return of 14.5% on Portogee's stock. Calculate the stock price today using the dividend discount modelStep by Step Solution
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