is a multinational company in the Telecommunications sector. It has grown organically over the last 8 years. TELECORP feels it has exhausted organic growth and is now reviewing a strategic plan to acquire a number ofcompanies to achieve synergies and to meet their growth forecasts. Telecorp has a policy of valuing the shares in a company using the free cash flows to equity model.

After much consideration TELECORP identified DIGICALL a small Telecommunications company as an acquisition opportunity. TELECORP and DIGICALL both operate in the same industry.

You have been provided with the extracts of the financial statements of DIGICALL for last year (2020).

Statement of Profit and Loss and Other Comprehensive Income of DIGICALL for 2020

000

Profit before interest and Tax537

Loan Interest(108)

Profit before tax429

Tax(86)

Profit after Tax343

Extract from the Statement of Financial Position of DIGICALL for 2020

000

Non-Current Assets1,825

Additions 88

1,913

Accumulated Depreciation (497)

1,416

Current Assets 485

Long term loan(1,200)

Net Assets 701