Jahangir hosiery mills is private limited company and closest to it is Bahram hosiery Limited, which listed on PSX as BHL. All financial and non-financial information pertaining to BHL dated December 31, 2018 and PACRA rating isBBB while beta is 1.25 and marginal tax rate is 38%. Current share price is Rs 50/share and basic shares outstanding are 98.50 million. Latest position of option of options/warrants are as under

Tranche# of SharesExercise Price

011.250Rs 10.00

021.00030.00

030.50040.00

040.25060.00

Current share price ofBHLis Rs 50/share, 52-week high price/low price Rs 62.50 & 40.00 respectively, and most recent quarter dividend paid was Rs 0.25/share. Balance sheet data is as under (Rs in million),

Balance Sheet(Rs in Million)

2018A

9/30/2019

Cash and cash equivalents

75.00

100.00

Account Receivable

625.00

650.00

Inventories

730.00

750.00

Prepaids & current assets

225.00

250.00

Total Current Assets

1,655.00

1,750.00

Property, Plant & Equipment, net

1,970.00

2,000.00

Goodwill and Intangible Assets

775.00

800.00

Other Assets

425.00

450.00

Total Assets

4,825.00

5,000.00

Account Payables

275.00

300.00

Accrued Liabilities

450.00

475.00

Other Current Liabilities

125.00

150.00

Total Current Liabilities

850.00

925.00

Total Debt

1,875.00

1,850.00

Other Long-term Liabilities

500.00

500.00

Total Liabilities

3,225.00

3,275.00

Noncontrolling interest

0.00

0.00

Preferred stock

0.00

0.00

Shareholders' Equity

1,600.00

1,725.00

Total Liabilities and Equity

4,825.00

5,000.00

Income Statement (Rsin millions, except per share data)

As on Dec,31

Prior Stub

Current Stub

LTM

2018A

9/30/2018

9/30/2019

9/30/2019

Sales

Rs 4,500.00

Rs 3,375.00

Rs 3,600.00

Rs 4,725.00

COGS (Incl.D&A)

2,925.00

2,200.00

2,350.00

3,075.00

Gross Profit

Rs 1,575.00

Rs 1,175.00

Rs 1,250.00

Rs 1,650.00

SG&A

900.00

675.00

720.00

945.00

Other Expenses/Income

0.00

0.00

0.00

0.00

EBIT

Rs 675.00

Rs 500.00

Rs 530.00

Rs 705.00

Interest Expense

102.00

75.00

73.00

100.00

Pre-Tax Income

573.00

425.00

457.00

605.00

Income taxes

217.70

161.50

173.70

229.90

Noncontrolling interest

0.00

0.00

0.00

0.00

Preferred Dividend

0.00

0.00

0.00

0.00

Net Income

Rs 355.30

Rs 263.50

Rs 283.30

Rs 375.10

Effective tax rate

0.38

0.38

0.38

0.38

WA Diluted Shares

100.00

100.00

100.00

100.00

Diluted EPS

Rs 3.55

Rs 2.64

Rs 2.83

Rs 3.75

Cash flow Statement

Cash from Operations

Rs 500.00

Rs 360.00

Rs 380.00

Rs 520.00

Capital Expenditure

200

150

155

205

% of sales

4.4%

4.4%

4.3%

4.3%

Free Cash Flow

300

210

225

315

% margin

6.7%

6.2%

6.3%

6.7%

Depr. & Amortization

Rs 175.00

Rs 125.00

Rs 125.00

Rs 175.00

% sales

3.9%

3.7%

3.5%

3.7%

Further Information

Non-recurring items are Rs 25.0 million pre-tax gain on sale of non-core business in Q4 2018

Non-recurring items are Rs 30.0 million pre-tax inventory valuation charge in Q2 2019related to product obsolescence

Non-recurring items are Rs 15.0 million pre-tax restructuring charge in Q3 2019related to severance costs

LTM Financial Data (Rs in millions, except per) share data (TABLE 1)

Current Share Price

Equity Value

Enterprise Value

Buyer Co

70.00

9,800.00

11,600.00

Shamim Co

40.00

5,600.00

8,101.00

Pearl Crop.

68.00

5,171.80

5,856.10

Kumar Co

52.50

4,851.60

5,344.60

Bahram hosieryLtd???

Required:

1.Calculate Gasparro Corp.'s in-the-money options/warrants(1-Mark)

2.Calculate proceeds from in-the-money options/warrants(1-Mark)

3.Calculate net new shares from the options/warrants(1-Mark)

4.Calculate fully diluted shares outstanding(1-Mark)

5.Calculate Gasparro's equity value and enterprise value.(1-Mark)

6.Calculate return on invested capital(1-Mark)

7.Calculate return on equity.(1-Mark)

8.Calculate return on assets.(1-Mark)

9.Calculate implied average dividend per share.(1-Mark)

10.Using the further information and Income statement provided forgaspro corp, make adjusted income statement.(5-Mark)

11.Using data in TABLE 1(along with current price,equity value & enterprise value ofGaspro corp),make comparative table showing enterprise value-to-LTM sales, enterprise value-to-LTM EBITDA, enterprise value-to-LTM EBIT, Price-to-LTM EPS, calculate mean, median and depict minimum and maximum range.(3-Mark)

12.Calculate implied valuation using LTM EBITDA, LTM EBIT, LTM EPS and explain which most appropriate. (3-Mark)

13.Explain the conditions under whichDDM and FCFF/FCFE are suitable (4-Marks)