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Please show solution in excel ABC Company is going through a period of fast growth. You want to know the current value of the stock
Please show solution in excel
ABC Company is going through a period of fast growth. You want to know the current value of the stock price and have gathered the following information current stock price Market Return Risk Free Rate Beta of ABC Number of Shares Initial Growth Rate (for the first 4 years) Second growth rate (perpetual): Most Recent Dividend Tax Rate $12 7% 1.5% 1.2 1,000,000 20% 3% $1.5 30% 28,000 Number of Bonds Bond Details Coupon rate Initial yield to maturity Settlement date Maturity date Face value # of coupons per year 3% 6% 1/1/2020 1/1/2024 100 4 Cost of Debt 6% Information from most recent BS and IS to calculate FCFF and FCFE Decrease in debt (10,000) EBIT 1,600,000 depreciation 5,000 interest exp 11,000 Capital expenditure 48,000 Increase in NWC 1,500 Estimate the stock price using Two Stage Growth Model model and Most Recent Dividend information 2 3 Year Dividend growth Dividend Terminal Value Sum of the cash flows PV Factor PV of dividend and Terminal value Current stock price: Estimate the stock price using Two Stage Growth model and FCFE Year growth (the same as Div Growth) FCFE Terminal Value Sum of the cash flows PV Factor PV of FCFE and Terminal value Current Market Value of Equity: Stock Price: Estimate the stock price using Two Stage Growth model and FCFF 3 Year growth (the same as Div Growth) FCFF Terminal Value Sum of the cash flows PV Factor PV of FCFF and Terminal value Current Market Value of Firm: ABC Company is going through a period of fast growth. You want to know the current value of the stock price and have gathered the following information current stock price Market Return Risk Free Rate Beta of ABC Number of Shares Initial Growth Rate (for the first 4 years) Second growth rate (perpetual): Most Recent Dividend Tax Rate $12 7% 1.5% 1.2 1,000,000 20% 3% $1.5 30% 28,000 Number of Bonds Bond Details Coupon rate Initial yield to maturity Settlement date Maturity date Face value # of coupons per year 3% 6% 1/1/2020 1/1/2024 100 4 Cost of Debt 6% Information from most recent BS and IS to calculate FCFF and FCFE Decrease in debt (10,000) EBIT 1,600,000 depreciation 5,000 interest exp 11,000 Capital expenditure 48,000 Increase in NWC 1,500 Estimate the stock price using Two Stage Growth Model model and Most Recent Dividend information 2 3 Year Dividend growth Dividend Terminal Value Sum of the cash flows PV Factor PV of dividend and Terminal value Current stock price: Estimate the stock price using Two Stage Growth model and FCFE Year growth (the same as Div Growth) FCFE Terminal Value Sum of the cash flows PV Factor PV of FCFE and Terminal value Current Market Value of Equity: Stock Price: Estimate the stock price using Two Stage Growth model and FCFF 3 Year growth (the same as Div Growth) FCFF Terminal Value Sum of the cash flows PV Factor PV of FCFF and Terminal value Current Market Value of FirmStep by Step Solution
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