Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please show excel formula. Only need Market Cap and price (everything shown in red). PLEASE SHOW EXCEL FUNCTION. This is all the information given on
please show excel formula. Only need Market Cap and price (everything shown in red). PLEASE SHOW EXCEL FUNCTION. This is all the information given on the question. I only need the answers to the questions in red. Thank you! You are evaluating the stock of Duff Beer, and you have decided to use free cash flows to the firm and free cash flow to equity as your two models. You project that next year Duff will have EBIT of $370 million, depreciation expense of $172 million, capital expenditure of $217 million, and an increase in net working capital of $38 million. Duff has no debt, and the company is not expected to add debt in the foreseeable future. Because there is no debt, there is also no interest expense. Duff's tax rate is 23%, its cost of equity is 12.1%, and its weighted average cost of capital is 12.1%. You project that free cash flows to the firm will grow at 1.6% indefinitely, and that free cash flows t equity will grow at 1.6%. If Duff has 495 million shares outstanding, what is the most you would pay for a share? ( 30 points total) You are evaluating the stock of Duff Beer, and you have decided to use free cash flows to the firm and free cash flow to equity as your two models. You project that next year Duff will have EBIT of $370 million, depreciation expense of $172 million, capital expenditure of $217 million, and an increase in net working capital of $38 million. Duff has no debt, and the company is not expected to add debt in the foreseeable future. Because there is no debt, there is also no interest expense. Duff's tax rate is 23%, its cost of equity is 12.1%, and its weighted average cost of capital is 12.1%. You project that free cash flows to the firm will grow at 1.6% indefinitely, and that free cash flows to equity will grow at 1.6%. If Duff has 495 million shares outstanding, what is the most you would pay for a share? ( 30 points total) \begin{tabular}{|l|lr|} \hline EBIT & $ & 370,000,000 \\ \hline Interest Exp. & $ & \\ \hline Depreciation & $ & 172,000,000 \\ \hline Cap Ex & $ & 217,000,000 \\ \hline NWC & $ & 38,000,000 \\ \hline Debt & $ & \\ \hline Shares & & 495,000,000 \\ \hline \end{tabular} \begin{tabular}{|l|r|} \hline Tax Rate & 23% \\ \hline Ret. to Equity & 12.1% \\ \hline WACC & 12.1% \\ \hline FCFF g & 1.6% \\ \hline FCFE g & 1.6% \\ \hline \end{tabular} \begin{tabular}{|l|l|} \hline FCFE & $201,900,000 \\ \hline Market Cap & $1,953,622,857 \\ \hline Price & \\ \hline \end{tabular}
PLEASE SHOW EXCEL FUNCTION. This is all the information given on the question. I only need the answers to the questions in red. Thank you!
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started