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Part 2 of 2 - Use the following questions to answer the next 4 questions: Ali, a financial analyst at Albaraka Asset Management, has been
Part 2 of 2 - Use the following questions to answer the next 4 questions: Ali, a financial analyst at Albaraka Asset Management, has been tasked to assess whether the shares of ABM Steel would be good addition to the funds Equity portfolio ABM stock is currently selling at 550 per share. Ali collected the following financial data on ADM to ascertain the share value based on DCF approach - Last year revenues were $500 million. Revenues were expected to grow at a rate of 12% for the next two years and then taper off to a steady-state growth rate of 390 . The firm's operating margin and net profit margin has averaged around 20% and 7%, respectively. Given the competitive position of ABM It is likely to maintain these margins in the future. ABM tax rate is 40% - ABM had long term debt of $40 milion and interest bearing nates payable of $10 million on its books which was close to the market value. The firm had 10 milion shares outstanding. The film had a stable capital structure with weighted average cost of capital of 14% The latest values (t = D) of net property plant and equipment (NPPE) and NWC as per the balance sheet were, 5200 million and $100 milion respectively. The firm did not have any surplus (non-operational cash. . Going forward Ali estimated that the firm is likely to improve its NWC turnover to 4X. However, its NPPE Tumover is likely to remain at 2 5X 10 Points Question 7 of 10 What is the net operating income after-tax (NOPAT) in year 2? Maximum number of characters induding HTML tags added by text editar) 32,000 Count Characters En Text Editor
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