Part 2 (23 marks) You are asked to value the equity (i.e., shares) in Truckers Limited (hereafter Truckers). The valuation date is 31 March 2020 when there were 150,000 (number in 000) shares on issue. Truckers' sales for the year ended 31 March 2020 were $500,000 (s amounts are in 000) and its consolidated (group) balance sheet as at 31 March 2020 (s amounts are in 000) is summarized as follows: Working capital $10,000 PPE and intangible assets S440.000 Net operating assets $450,000 Net non-operating obligations (ie., interest bearing debt) $200,000 Equity (i... Shareholders' funds) $250,000 Total capital $450,000 You may assume Truckers weighted average cost of capital (WACC) is 10 percent. Assume that, following an analysis of Truckers" past performance, a SWOT analysis of its business, anticipated actions by its competitors, developments in the industry and discussions with senior management, you make the following assumptions about Truckers' forecasted performance over the five year forecast horizon period (the years ended 31 March 2021 to 31 March 2025, inclusive) and the terminal (or perpetuity) period starting with the year ended 31 March 2026 Terminal Horizon period period 2021 2022 2023 2024 2025 2026 Sales growth 15.0% 13.0% 11.0% 9.0% 5.0% 40% EBIT % 17.0% 17.0% 16.8% 16.8% 16.6% 16,4% Company tax rate 28.0% 28.0% 28.0% 28.0% 28.0% 28.0% Working capital turnover (WCT) 40.0 40.0 41.0 41.0 42.0 42.0 PPE and intangible assets tumover (PPET) 1.30 1.31 1.32 1.33 1.34 1 34 Required: Computes Truckers' value per share as at 31 March 2020 using the Discounted Cash Flow (DCF) Model Part 2 (23 marks) You are asked to value the equity (i.e., shares) in Truckers Limited (hereafter Truckers). The valuation date is 31 March 2020 when there were 150,000 (number in 000) shares on issue. Truckers' sales for the year ended 31 March 2020 were $500,000 (s amounts are in 000) and its consolidated (group) balance sheet as at 31 March 2020 (s amounts are in 000) is summarized as follows: Working capital $10,000 PPE and intangible assets S440.000 Net operating assets $450,000 Net non-operating obligations (ie., interest bearing debt) $200,000 Equity (i... Shareholders' funds) $250,000 Total capital $450,000 You may assume Truckers weighted average cost of capital (WACC) is 10 percent. Assume that, following an analysis of Truckers" past performance, a SWOT analysis of its business, anticipated actions by its competitors, developments in the industry and discussions with senior management, you make the following assumptions about Truckers' forecasted performance over the five year forecast horizon period (the years ended 31 March 2021 to 31 March 2025, inclusive) and the terminal (or perpetuity) period starting with the year ended 31 March 2026 Terminal Horizon period period 2021 2022 2023 2024 2025 2026 Sales growth 15.0% 13.0% 11.0% 9.0% 5.0% 40% EBIT % 17.0% 17.0% 16.8% 16.8% 16.6% 16,4% Company tax rate 28.0% 28.0% 28.0% 28.0% 28.0% 28.0% Working capital turnover (WCT) 40.0 40.0 41.0 41.0 42.0 42.0 PPE and intangible assets tumover (PPET) 1.30 1.31 1.32 1.33 1.34 1 34 Required: Computes Truckers' value per share as at 31 March 2020 using the Discounted Cash Flow (DCF) Model
