Question 1: (10)

ABC Company: BALANCE SHEET as of December 31, 2011 (Millions of Dollars)

ASSET	2010	2011	LIABILITIES & EQUITY	2010	2011
Cash	10	12	Accounts payable	90	108
Short-term Investment	2	3	Notes payable	53	67
Accounts receivable	150	180	Accruals	60	75
Inventories	200	180	Total current liabilities	203	250
Total current	362	375	Long-term debt	150	150
Net fixed assets	250	300	Common stock (50 million shares)	50	50
Total assets	612	675	Retained earnings	208.5	225
			Total equity	258	275
			Total liabilities and equity	612	675

ABC Company: INCOME STATEMENT for December 31, 2011 (Millions of Dollars)

	2011
Sales	1,200
Operating costs excluding depreciation	1020
Depreciation	30
EBIT	150
Interest expense	21.7
EBT	128.3
Taxes (40%)	51.3
Net income	77
Common Dividends	60.5

Following Additional Information

• WACC is 12%
• FCF will grow 20% in 2012 & 2013, 15% in 2014 & then constant growth by 6% thereafter.
• Authorized share 20 million, Issued shares 12 million & Treasury stock 2 million
• In 2011 Assume Capital requirement (CR) is 41%, sales from income statement will grow 6% forever and other information from income statement & balance sheet to calculate Part 9 from this information

Calculate the Followings

1. NOPAT 2011
2. FCF 2011
3. Value of Operation (VoP) terminal or horizon Value
4. Value of Operation (VoP)
5. What is Total value of the firm in year 2011
6. Value of Common Equity
7. What is Price per share
8. MVA