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Income Statement 2019A 2020A 2021A Sales Volume (000's units) 326.4 326.6 344.5 Unit Price (CDN$/unit) 654.0 707.9 594.4 Revenue (C$ MM) 213.5 231.2 204.8 Variable
Income Statement | 2019A | 2020A | 2021A | ||||||||||
Sales Volume | (000's units) | 326.4 | 326.6 | 344.5 | |||||||||
Unit Price | (CDN$/unit) | 654.0 | 707.9 | 594.4 | |||||||||
Revenue | (C$ MM) | 213.5 | 231.2 | 204.8 | |||||||||
Variable Cost | (C$ MM) | 95.0 | 97.4 | 100.9 | |||||||||
Fixed Cost | 65.0 | 65.0 | 67.0 | ||||||||||
S,G & A | (C$ MM) | 3.4 | 3.6 | 3.8 | |||||||||
Total Costs | (C$ MM) | 163.4 | 166.0 | 171.7 | |||||||||
EBITDA | (C$ MM) | 50.1 | 65.2 | 33.1 | |||||||||
Depreciation | (C$ MM) | 15.4 | 15.5 | 15.8 | |||||||||
EBIT | (C$ MM) | 34.7 | 49.7 | 17.3 | |||||||||
Interest Expense | (C$ MM) | 15.0 | 15.0 | 14.0 | |||||||||
EBT | (C$ MM) | 19.7 | 34.7 | 3.3 | |||||||||
Total Income Taxes | (C$ MM) | 5.7 | 14.2 | 1.1 | |||||||||
Net Income | (C$ MM) | $14.0 | $20.5 | $2.2 | |||||||||
Average Diluted Shares O/S | (MM's) | 13.9 | 14.2 | 14.6 | |||||||||
Earnings per Share | (C$ / share) | $1.01 | $1.44 | $0.15 | |||||||||
Question: | |||||||||||||
1 | What is the company expected share price? Consider the following assumptions: | ||||||||||||
* | The required rate of return is 10%, and the TV growth rate is 3% | ||||||||||||
* | The expected tax rate is 36% | ||||||||||||
* | The company current outstanding long term debt is $300 million at 5% interest rate, and it is expected to stay at the same level in the coming years | ||||||||||||
* | The company sales volume is expected to grow by 10% in 2022 and 2023, and by 5% in the following three years | ||||||||||||
* | The company sales price is expected to grow by the inflation rate (expected at 2%) | ||||||||||||
* | The expected capex is $10 million annually over the coming 5 years and is depreciated at a rate of 10% | ||||||||||||
* | The variable cost margin is expected to be 45% over the coming 5 years | ||||||||||||
* | Fixed cost and S,G & A are expected to increase by the inflation rate of 2% | ||||||||||||
* | The expected change in net working capital is 10% of the sales (usage) |
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