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Please do by hand if you can, excel does not help me Finding Share price for TGI with uneven growth in FCF: 3-Stage Model Version
Please do by hand if you can, excel does not help me
Finding Share price for TGI with uneven growth in FCF: 3-Stage Model Version II In-Class Exercise A financial analyst from Raymond James made the following forecast for Hi-tech Firm TGI between 2013-2015(in millions of dollars) at the end of 2012 Cash Flows From Operating Activities: 2015 $400$480 $520 $120 $150 $210 $230 $90 $105 2013 2014 Net Income Depreciation and amortization Increase in inventories $100 $200 $80 in accounts receivable Cash Flows From Invesing Activities: 2013 $230 S50 2014 $240$265 Capital Expenditures: property, plant and equipment (PP&E) M&A: Purchase of Other Business S65 $80 Raymond James expects a constant growth of 8% in Cash flow from operations after 2015 However, Raymond James is expecting uneven above-average growth in cash flows from Investing activities. Specifically, TGI is expected to have an initial six-year period of 1 2% per year growth after 2015. Analysts anticipates that TGI will increase its cash flows from investing activities 4% per year as a mature company, and allows 8 years for the transition to the mature growth period. Please calculate the value per share at the end of 2012 if TGI reported $4,400 in short-term and long-term debt and 400 million shares outstanding at the end of 201 2 . (WACC= 10%)
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