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Corporation Valuation

Use the following data to calculate MicroDrives Horizon Value, Value of Operations, and Estimated Stock Price.Show all calculations on a separate sheet of paper.

Global finance manager. Question - Corporation Valuation Use the following data to calculate MicroDrive's Horizon Value, Value of Operations, and Estimated Stock Price. Show all calculations on a separate sheet of paper. Figure 12-1 MicroDrive's Most Recent Financial Statements (Millions, Except for Per Share Data) INCOME STATEMENTS BALANCE SHEETS 2012 2013 Assets Net sales $ 4,760 $ 5,000 Cash COGS (excl. depr.) 3,560 3,800 ST Investments Depreciation 170 200 Accounts receivable Other operating expenses 480 500 Inventories EBIT $ 550 $ 500 Total CA Interest expense 100 120 Net PP&E Pre-tax earnings $ 450 $ 380 Total assets Taxes (40%) 180 152 NI before pref. div. $ 270 $ 228 Liabilities and equity Preferred div. 8 8 Accounts payable Net income $ 262 $ 220 Accruals Notes payable Other Data Total CL Common dividends $48 $50 Long-term bonds Addition to RE $214 $170 Total liabilities Tax rate 40% 40% Preferred stock Shares of common stock 50 50 Common stock Earnings per share $5.24 $4.40 Retained earnings Dividends per share $0.96 $1.00 Total common equity Price per share $40.00 $27.00 Total liabs. & equity 2012 60 40 380 820 $ 1,300 1,700 $ 3,000 $ $ $ $ $ $ 190 280 130 600 1,000 1,600 100 500 800 1,300 3,000 $ $ $ $ $ $ $ $ 2013 50 500 1,000 1,550 2,000 3,550 200 300 280 780 1,200 1,980 100 500 970 1,470 3,550 Its not clear in picture horizon value formulae HORIZON VALUE HV2018 = FCF2018(1+GL) / (WACC - GL)