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<\/div><\/div><\/div> NEIVJBS Inc. TEPOITECI HIE TOIIOWIDE Income Statement TOT (EUXJ. (In mIIIIOHS'I Sales 54,600 Cost of sales 1,610 Selling, general and admin 506 Depreciation 960 Interest 324 Net income before taxes W Taxes 432 Net income W You expect that the UPR's costs will behave as follows: Sales will increase by 4% per year Cost of sales as a percentage of sales will be 36% in 20x2, 37% in 20x3 and 38% in 20x4 and will remain stable at 38% after that Selling, general and admin expenses as a percentage of sales will be 10% in 20x2, 9% in 20x3 and will remain stable at 9% after that Depreciation is expected to remain stable Capital expenditures are expected to be $1.2 billion in 20x2, $1.0 billion in 20x3 and will remain stable at $1.0 billion after that working capital varies directly with sales. Working capital at the end of 20x1 was $1,840 Assume that the 20x6 free cash flow will increase by 4% over the 20x5 free cash flow and will grow at this rate to perpetuity The firm also had $4 billion of debt outstanding , rated AA (carrying a yield to matun of 8%), trading at par. The beta of the stock is 1.05, and there were 200 million shar outstanding (trading at $60 per share}, with a book value of $5 billion. The treasury bond rate is 7%, the market risk premium is 5.5%. Estimate the cost of capital and the estimated value of the rm at the end of 20x1",
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"related_book": {
"title": "Entrepreneurship",
"isbn": "1119563097, 9781119563099",
"edition": "5th Edition",
"authors": "Andrew Zacharakis, William D Bygrave",
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"uri": "\/textbooks\/2d-boron-boraphene-borophene-boronene-1st-edition-978-3030500016-364813",
"name": "2d Boron Boraphene Borophene Boronene",
"edition": "1st Edition"
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"question_posted": "2024-06-06 19:02:41",
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