Answered step by step
Verified Expert Solution
Question
1 Approved Answer
QUESTION THREE OUESTION 2 HREE As a student of corporate valuation, you have been given the task of estimating the fundamental value of Highway Limited,
QUESTION THREE OUESTION HREE
As a student of corporate valuation, you have been given the task of estimating the
fundamental value of Highway Limited, givastlao You have been provided with the
following schedules.
Schedule :: Finance Schedule
Schedule : Income Statement Schedule
Revenue
Cost of sales
Other operating expenses
Depreciation
Interest expense
Eamings before tax
Tax expenses
Earning After tax
Schedule : Depreciation
Depreciation
Depreciation
Actual
million
Projected
Sh million
Projected
Sh million.
Schedule ; Worlaing Canital Items Schedule : NonCurrent Assets NCA
Acditionsl Inionnation:
i After accounting period free cash flow to the firm is expected to grow at an
annusl rate of five percent for the next eleven years and three percent thereafter
forever.
ii Bstimated discounted rate is eight percent during the high growth period and five
percent during the steady state.
Riequired:
Using the Free cash flow to the Firm model, estimate the value of Highway
limited
mariks
As a student of corporate valuation, you have been given the task of estimating the fundamental value of Highway Limited, giver the You have been provided with the following schedules.
Schedule : Finance Schedule
Actual
Shs Million
Projected
Shs million
Ordinary share capital
Retained Earning
Debt
Schedule : Income Statement Schedule
Actual
Projected
Sh million
Sh million
Revenue
Cost of sales
Other operating expenses
Depreciation
Interest expense
Earnings before tax
Tax expenses
Earning After tax
Schedule : Depreciation
Actual Sh'million
Projected
Sh million lion
Depreciation
Schedule : Working Capital Items
Actual
Projected
Sh million
Sh million
Cash
Accounts Receivable
Inventory
Account Payables
Accruals
Notes Payable
D
Schedule : NonCurrent Assets NCA
Projected
Sh million
Machinery Cost
Equipment Cost
Actual
Sh million
Acc. Depreciation machinery
Acc. Depreciation Equipment
Additional Information:
After accounting period free cash flow to the firm is expected to grow at an annual rate of five percent for the next eleven years and three percent thereafter forever.
ii Estimated discounted rate is eight percent during the high growth period and five percent during the steady state.
Required:
Using the Free cash flow to the Firm model, estimate the value of Highway limited
marks
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