Problem: Gal Company has asked you to review its financial statements and derives necessary information in formulating steps and creates viable strategies for effective financial management. Gal company is a manufacturing export company and has placed various placement is several financial institutions and both local and International. Excerpts of its financial statements as of and for the year ended December 31, 2019, and the projections in the subsequent years revealed the following: 2019 2020 2021 2022 2023 2024 REVENUE 11,000,000.00 11,220,000.00 11,556,600.00 12,134,430.00 12,741,151.50 13,378,209.08 INVESTMENT IN 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00 TREASURY BONDS (3%, P.A. NET OF 20%FINAL TAXES) INVESTMENT IN 1,200,000.00 1,200,000.00 1,200,000.00 1,200,000.00 1,200,000.00 1,200,000.00 CALLABLES BONDS (2.5% P.A. NET OF 20% TAXES) COST OF DEBT IN 6.50% 6.50% 6.50% 6.50% 6.50% 6.50% METROBANK SHARE CAPITAL 10,000,000.00 10,000,000.00 10,000,000.00 10,000,000.00 10,000,000.00 10,000,000.00 SUBSCRIBED AND PAID WITH PHP 100 PAR VALUE CASH DIVIDENDS 1,000,000.00 DECLARED Market price per 125.00 120.00 N/A N/A N/A N/A Philippine Stock Exchange Dividends in the year 2020 will depend on the magnitude of its marketing efforts and will grow along with revenue growth. Prior to cash dividends declaration in 2019, total retained earnings amounted to Php 3,000,000.00. The growth rate for 2019 only is 1.50% Further, the Philippines financial market has reported an average total return of 11.79%, comprised of the following and will be projected to have the same level of returns up to 2024. Banking 10.50% Media outlet 12.00% IT Infrastructure 10.00% Manufacturing 13.00% Mining and oil Property 14.00% 11.79% 11.25% GAL Company is less volatile by 25% than the market since 2019 and as projected. QUESTIONS 1. WHEN IS THE TERMINAL DATE OF THE GIVEN TR. CELEX A DECEMBER 31,2020 B. DECEMBER 3, 2011 C. DECEMBER 31, 2012 D. DECEMBER 31, 2019 2. N THE WHOLE CONTEXT OF THE PROBLEM HOW MUCH IS THE STOCK PRICE? A 164.34 B. 15972 C.154.78 D. 164.21 9. F YOU ARE POTENTIAL NVESTOR NGAL COMPANY HOW MUCHARE YOU WILLING TO PAY TO ACQUIRE A SHARE OF STOCX AS OF DECEMBER 31 2019? A 125 3.120 C100 D. 110 4. AS AN INVESTOR, HOW MUCH ARE YOU WILLING TO PAY FOR GAL CONRAVESTOCXN 200 ASSUMING A CONSTANT GROWTH OF 2 PERCENT? A 1236 B. 120 3. HOW MUCH IS THE RISK FREE RATE OF THE GAL COMPANY A 3% D. 3.1234 6. HOW MUCH IS THE EXPECTED RETLENOF GAL COMPANY IN 2003 A 11.236 B.10.25% C10.90% D. 9.75% 1. WHAT IS THE GROWTH RATE EFFECTIVE 2022 A5% 3. HOW MUCH IS THE GAL COMPANYS HORIZON VALLE? A 200.37 C.165.75 D. 200.90 9. HOW MUCH IS THENTRINSIC STOCK PRICE OF CAL COMPANY IN THE YEAR 2009 ASSUMINGA CONSTANT GROWTH RATE SINCE 2019 A 125 3:20 C100 D. 110 10 HOW MUCH IS THE COMPANY'S MARKET RISK PREMIS A 10% Problem: Gal Company has asked you to review its financial statements and derives necessary information in formulating steps and creates viable strategies for effective financial management. Gal company is a manufacturing export company and has placed various placement is several financial institutions and both local and International. Excerpts of its financial statements as of and for the year ended December 31, 2019, and the projections in the subsequent years revealed the following: 2019 2020 2021 2022 2023 2024 REVENUE 11,000,000.00 11,220,000.00 11,556,600.00 12,134,430.00 12,741,151.50 13,378,209.08 INVESTMENT IN 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00 TREASURY BONDS (3%, P.A. NET OF 20%FINAL TAXES) INVESTMENT IN 1,200,000.00 1,200,000.00 1,200,000.00 1,200,000.00 1,200,000.00 1,200,000.00 CALLABLES BONDS (2.5% P.A. NET OF 20% TAXES) COST OF DEBT IN 6.50% 6.50% 6.50% 6.50% 6.50% 6.50% METROBANK SHARE CAPITAL 10,000,000.00 10,000,000.00 10,000,000.00 10,000,000.00 10,000,000.00 10,000,000.00 SUBSCRIBED AND PAID WITH PHP 100 PAR VALUE CASH DIVIDENDS 1,000,000.00 DECLARED Market price per 125.00 120.00 N/A N/A N/A N/A Philippine Stock Exchange Dividends in the year 2020 will depend on the magnitude of its marketing efforts and will grow along with revenue growth. Prior to cash dividends declaration in 2019, total retained earnings amounted to Php 3,000,000.00. The growth rate for 2019 only is 1.50% Further, the Philippines financial market has reported an average total return of 11.79%, comprised of the following and will be projected to have the same level of returns up to 2024. Banking 10.50% Media outlet 12.00% IT Infrastructure 10.00% Manufacturing 13.00% Mining and oil Property 14.00% 11.79% 11.25% GAL Company is less volatile by 25% than the market since 2019 and as projected. QUESTIONS 1. WHEN IS THE TERMINAL DATE OF THE GIVEN TR. CELEX A DECEMBER 31,2020 B. DECEMBER 3, 2011 C. DECEMBER 31, 2012 D. DECEMBER 31, 2019 2. N THE WHOLE CONTEXT OF THE PROBLEM HOW MUCH IS THE STOCK PRICE? A 164.34 B. 15972 C.154.78 D. 164.21 9. F YOU ARE POTENTIAL NVESTOR NGAL COMPANY HOW MUCHARE YOU WILLING TO PAY TO ACQUIRE A SHARE OF STOCX AS OF DECEMBER 31 2019? A 125 3.120 C100 D. 110 4. AS AN INVESTOR, HOW MUCH ARE YOU WILLING TO PAY FOR GAL CONRAVESTOCXN 200 ASSUMING A CONSTANT GROWTH OF 2 PERCENT? A 1236 B. 120 3. HOW MUCH IS THE RISK FREE RATE OF THE GAL COMPANY A 3% D. 3.1234 6. HOW MUCH IS THE EXPECTED RETLENOF GAL COMPANY IN 2003 A 11.236 B.10.25% C10.90% D. 9.75% 1. WHAT IS THE GROWTH RATE EFFECTIVE 2022 A5% 3. HOW MUCH IS THE GAL COMPANYS HORIZON VALLE? A 200.37 C.165.75 D. 200.90 9. HOW MUCH IS THENTRINSIC STOCK PRICE OF CAL COMPANY IN THE YEAR 2009 ASSUMINGA CONSTANT GROWTH RATE SINCE 2019 A 125 3:20 C100 D. 110 10 HOW MUCH IS THE COMPANY'S MARKET RISK PREMIS A 10%