Part 1: Calculate Value of Operations & Intrinsic Stock Price for 2019
MacroDrives sales are expected to continue with growth at 6% in 2024 and thereafter. The WACC is 12.5%. In all intermediate steps round to the nearest dollar. Calculate value of operations and intrinsic value of equity (PPS) for 2019.
MacroDrive's Forecast of Operations for the Selected Scenario (Millions of Dollars, Except for Per Share Data) Status Quo MacroDrive MacroDrive Panel A: Actual Forecast Operating Ratios 2018 2019 2020 2021 2022 2023 2024 10% 4% 8% 7% 6.5% 6% 6% g= Sales growth rate OP = NOPAT/Sales 6.9% 6.2% 6.20% 6.20% 6.20% 6.20% 6.20% CR = OpCap/Sales 51.9% 55% 55.00% 55.00% 55.00% 55.00% 55.00% Tax rate 25% 25% 25.00% 25.00% 25.00% 25.00% 25.00% Panel B: Actual Forecast Operating Items 2019 2020 2021 2022 2023 2024 Net sales $5,000 $310 Net operating profit after taxes Total net operating capital (QpCap) FCF = NOPAT - Investment in QpCap. $2,750 -$210 ROIC = NOPAT/QpCap 11.27% Note: Numbers are reported as rounded values for clarity, but are calculated using Excel's full precision. Thus, intermediate calculations using the figure's rounded values will be inexact. WACC = 12.5% MacroDrive Has (Millions of Dollars): S-T Investments = 100 Total Debt = 750 Preferred Stock = 665 Estimated Intrinsic Value of Equity = Number of Shares Outstanding = 100 million Estimated Intrinsic Stock Price = Requirements: Calculate Vor & Intrinsic PPS. MacroDrive's Forecast of Operations for the Selected Scenario (Millions of Dollars, Except for Per Share Data) Status Quo MacroDrive MacroDrive Panel A: Actual Forecast Operating Ratios 2018 2019 2020 2021 2022 2023 2024 10% 4% 8% 7% 6.5% 6% 6% g= Sales growth rate OP = NOPAT/Sales 6.9% 6.2% 6.20% 6.20% 6.20% 6.20% 6.20% CR = OpCap/Sales 51.9% 55% 55.00% 55.00% 55.00% 55.00% 55.00% Tax rate 25% 25% 25.00% 25.00% 25.00% 25.00% 25.00% Panel B: Actual Forecast Operating Items 2019 2020 2021 2022 2023 2024 Net sales $5,000 $310 Net operating profit after taxes Total net operating capital (QpCap) FCF = NOPAT - Investment in QpCap. $2,750 -$210 ROIC = NOPAT/QpCap 11.27% Note: Numbers are reported as rounded values for clarity, but are calculated using Excel's full precision. Thus, intermediate calculations using the figure's rounded values will be inexact. WACC = 12.5% MacroDrive Has (Millions of Dollars): S-T Investments = 100 Total Debt = 750 Preferred Stock = 665 Estimated Intrinsic Value of Equity = Number of Shares Outstanding = 100 million Estimated Intrinsic Stock Price = Requirements: Calculate Vor & Intrinsic PPS
