Question
($ millions) year 0 year 1 Sales $ 500 520 Operating Costs 200 208 EBIT 300 312 Interest Expense 20 20 EBT 280 292 Taxes
($ millions) year 0 year 1
Sales $ 500 520
Operating Costs 200 208
EBIT 300 312
Interest Expense 20 20
EBT 280 292
Taxes (25%) 70 73
Net Income $ 210 219
Dividends 200 200
Add to RE 10 19
Balance Sheet
Cash $ 10 12
Receivables 100 105
Inventories 100 105
Current Assets 210 222
Net Fixed Assets 150 160
Total Assets 360 382
Accounts Payable 40 41
Notes Payable 10 11
Accruals 30 31
Current Liabilities 80 83
Bonds 50 50
Common Stock 100 100
Retained Earnings 130 149
Total Liab & Eq $ 360 382
Corporate Valuation Model
- Find the market value of the common stock assuming the book value of debt equals the market value.
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International Financial Reporting Standards An Introduction
Authors: Belverd E. Needles, Marian Powers
3rd Edition
1133187943, 978-1133187943
