once you find the equity value after calculation.. divide it by the number of shares

Final Assessment QUESTION 1) (30 pts) Using the below financial statements and additional information given for Company , a) Using Discounted Cash Flows method, calculate the equity value as of June 1, 2020. (25 pts) b) What would you suggest to the investors of ABC? BUY additional shares, HOLD the shares on hand or SELL the shares on hand? Why? (5 pts) Fiscal year 2019A 2020E 2021E 2022E 2023E 2024E Balance sheet (KWD thousand) Operating working capital 17,669.5 18,278.6 19,900.5 21,840.4 24,461.3 26,907.4 Net non-current operating assets 101,744.8 107,640.5 119,610.0 132,901.2 148,849.4 163,734.3 Investment assets 5,288.5 7,939.2 8,913.7 9,990.8 11,189.7 12,308.7 = Business assets 124,702.8 133,858.3 148,424.2 164,732.5 184,500.4 202,950.4 Debt 73,146.8 77,236.2 85,640.8 95,050.6 106,456.7 117,102.4 Shareholders' Equity 51,556.0 56,622.1 62,783.4 69,681.8 78,043.7 85,848.0 = Debt + Shareholders' Equity 124,702.8 133,858.3 148,424.2 164,732.5 184,500.4 202,950.4 Income statement (KWD thousand) Sales Net operating profit after tax + Net investment profit after tax = Net business profit after tax -Net interest expense after tax = Net profit 2019A 2020E 2021E 2022E 2023E 184,632.1 207,296.4 232,344.8 260,226.2 286,248.8 24,186.8 29,228.8 34,387.0 36,431.7 37,212.3 317.6 356.5 399.6 447.6 492.3 24,504.4 29,585.3 34,786.7 36,879.3 37,704.7 -1,390.3 -1,712.8 -2,091.1 -2,661.4 -3,278.9 23,114.1 27,872.5 32,695.6 34,217.8 34,425.8 2024E 309,148.7 37,097.8 531.7 37,629.6 -3,794.1 33,835.5 E = estimated A= Actual (Real) Additional information: 1) Cost of debt is 15% 2) Cost of equity is 25% 3) Number of shares is 100 million. 4) Assume that at the end of 2024 company owners will sell the company's assets with their book value and will pay all debt on the balance sheet. Hint: The remaining cash on hand can be considered as the terminal value. 5) Boursa price per share is 720 fils on June 1, 2020. YOU FIND VALUE PER SHARE COMPARE THIS VALUE PER SHARE with THE BOURSA PRICE AND YOU WILL DECIDE TO BUY MORE OR SELL OR HOLD DEPENDING ON YOUR COMPARISON IF THE VLAUE YOU FOUND IS LESS THAT BOURSA PRICE SELLL IF THE VLAUE YOU FOUND IS MORE THAN BOURSA PRICE BUY NEW SHARES IF THE VLAUE YOU FOUND IS AROUNDTHE BOURSA PRICE HOLD THERE ARE THREE TYPES OF VALUES OF THE COMPANY 1- BOOK VALUE - TOTAL SHAREHOLDERS EQUITY ON THE BALANCE SHEET 2- MARKET VALUE - PRECE PER SHARE IN BOURSA X NUMBER OF SHARES 3- INTRINSIC VALUE THAT WE CALCULATE B 2017R D 2019E 2018E 192 0.9091 174,5 210 0.8264 173.6 E 2020E 215 0.7513 161.5 G Terminal value 1,130 This is the amount of equity 0.7513 is calculated using WACC which is 10% as calculated belos 8490 KWD thousand 1.358.6 sum of PV of FCF KWD A 23 24 Free cash flow to equity 25 Discount factor 26 PV of FCF 27 28 Value on January 1, 2018 29 30 value on January 1, 2018 31 32 Number of Shares 33 34 Valun per share 35 36 Boursa price 37 38 39 40 41 1,358,617.6 calculated 10.990.000 from financial report 136 calculated 120 from Boursa website fils BUY our decision Final Assessment QUESTION 1) (30 pts) Using the below financial statements and additional information given for Company , a) Using Discounted Cash Flows method, calculate the equity value as of June 1, 2020. (25 pts) b) What would you suggest to the investors of ABC? BUY additional shares, HOLD the shares on hand or SELL the shares on hand? Why? (5 pts) Fiscal year 2019A 2020E 2021E 2022E 2023E 2024E Balance sheet (KWD thousand) Operating working capital 17,669.5 18,278.6 19,900.5 21,840.4 24,461.3 26,907.4 Net non-current operating assets 101,744.8 107,640.5 119,610.0 132,901.2 148,849.4 163,734.3 Investment assets 5,288.5 7,939.2 8,913.7 9,990.8 11,189.7 12,308.7 = Business assets 124,702.8 133,858.3 148,424.2 164,732.5 184,500.4 202,950.4 Debt 73,146.8 77,236.2 85,640.8 95,050.6 106,456.7 117,102.4 Shareholders' Equity 51,556.0 56,622.1 62,783.4 69,681.8 78,043.7 85,848.0 = Debt + Shareholders' Equity 124,702.8 133,858.3 148,424.2 164,732.5 184,500.4 202,950.4 Income statement (KWD thousand) Sales Net operating profit after tax + Net investment profit after tax = Net business profit after tax -Net interest expense after tax = Net profit 2019A 2020E 2021E 2022E 2023E 184,632.1 207,296.4 232,344.8 260,226.2 286,248.8 24,186.8 29,228.8 34,387.0 36,431.7 37,212.3 317.6 356.5 399.6 447.6 492.3 24,504.4 29,585.3 34,786.7 36,879.3 37,704.7 -1,390.3 -1,712.8 -2,091.1 -2,661.4 -3,278.9 23,114.1 27,872.5 32,695.6 34,217.8 34,425.8 2024E 309,148.7 37,097.8 531.7 37,629.6 -3,794.1 33,835.5 E = estimated A= Actual (Real) Additional information: 1) Cost of debt is 15% 2) Cost of equity is 25% 3) Number of shares is 100 million. 4) Assume that at the end of 2024 company owners will sell the company's assets with their book value and will pay all debt on the balance sheet. Hint: The remaining cash on hand can be considered as the terminal value. 5) Boursa price per share is 720 fils on June 1, 2020. YOU FIND VALUE PER SHARE COMPARE THIS VALUE PER SHARE with THE BOURSA PRICE AND YOU WILL DECIDE TO BUY MORE OR SELL OR HOLD DEPENDING ON YOUR COMPARISON IF THE VLAUE YOU FOUND IS LESS THAT BOURSA PRICE SELLL IF THE VLAUE YOU FOUND IS MORE THAN BOURSA PRICE BUY NEW SHARES IF THE VLAUE YOU FOUND IS AROUNDTHE BOURSA PRICE HOLD THERE ARE THREE TYPES OF VALUES OF THE COMPANY 1- BOOK VALUE - TOTAL SHAREHOLDERS EQUITY ON THE BALANCE SHEET 2- MARKET VALUE - PRECE PER SHARE IN BOURSA X NUMBER OF SHARES 3- INTRINSIC VALUE THAT WE CALCULATE B 2017R D 2019E 2018E 192 0.9091 174,5 210 0.8264 173.6 E 2020E 215 0.7513 161.5 G Terminal value 1,130 This is the amount of equity 0.7513 is calculated using WACC which is 10% as calculated belos 8490 KWD thousand 1.358.6 sum of PV of FCF KWD A 23 24 Free cash flow to equity 25 Discount factor 26 PV of FCF 27 28 Value on January 1, 2018 29 30 value on January 1, 2018 31 32 Number of Shares 33 34 Valun per share 35 36 Boursa price 37 38 39 40 41 1,358,617.6 calculated 10.990.000 from financial report 136 calculated 120 from Boursa website fils BUY our decision