Q1 a. Following are the details of Garnet Inc in Millions of $ Garnet Inc. 2013 2012 Income Statement Net sales $930.0 $700.0 Costs (except depreciation) 400.0 380.0 Depreciation 30.0 25.0 Total operating costs 430.0 405.0 Earnings before interest and taxes (EBIT) 100.0 95.0 Less interest 23.0 21.0 Earnings before taxes 77.0 74.0 Taxes (30%) 23.1 22.2 Net income $ 53.9 $ 51.8 Balance Sheet $ 28.0 $ 27.0 69.0 66.0 84.0 80.0 112.0 106.0 293.0 279.0 281.0 265.0 $574.0 $544.0 Assets Cash Marketable securities Accounts receivable Inventories Total current assets Net plant and equipment Total assets Liabilities and Equity Accounts payable Notes payable Total current liabilities Long-term bonds Preferred stock Retained earnings Common equity Total liabilities and equity $ 56.0 $ 52.0 138.0 130.0 222.0 210.0 173.0 164.0 100.0 100.0 79.0 70.0 179.0 170.0 $574.0 $544.0 A) If the growth rate beyond 2013 is 5%. WACC is 12%. And number of shares is 100M i. Calculate Free Cash flows. ii. Value of operations iii. Value of Company iv. Market Value added Q1 a. Following are the details of Garnet Inc in Millions of $ Garnet Inc. 2013 2012 Income Statement Net sales $930.0 $700.0 Costs (except depreciation) 400.0 380.0 Depreciation 30.0 25.0 Total operating costs 430.0 405.0 Earnings before interest and taxes (EBIT) 100.0 95.0 Less interest 23.0 21.0 Earnings before taxes 77.0 74.0 Taxes (30%) 23.1 22.2 Net income $ 53.9 $ 51.8 Balance Sheet $ 28.0 $ 27.0 69.0 66.0 84.0 80.0 112.0 106.0 293.0 279.0 281.0 265.0 $574.0 $544.0 Assets Cash Marketable securities Accounts receivable Inventories Total current assets Net plant and equipment Total assets Liabilities and Equity Accounts payable Notes payable Total current liabilities Long-term bonds Preferred stock Retained earnings Common equity Total liabilities and equity $ 56.0 $ 52.0 138.0 130.0 222.0 210.0 173.0 164.0 100.0 100.0 79.0 70.0 179.0 170.0 $574.0 $544.0 A) If the growth rate beyond 2013 is 5%. WACC is 12%. And number of shares is 100M i. Calculate Free Cash flows. ii. Value of operations iii. Value of Company iv. Market Value added