Question
Sales 500m Operating margin 10% Debt 200m Equity 300m Interest cost 5% Tax rate 20% Unlevered historic beta 0.6 Depreciation charge of 20m 100m shares
Sales 500m
Operating margin 10%
Debt 200m
Equity 300m
Interest cost 5%
Tax rate 20%
Unlevered historic beta 0.6
Depreciation charge of 20m
100m shares outstanding
Risk free rate = 2% market premium = 7%
What is company's EPS?
What is the share price? Assume company has a market cap of E400m
What is its PER?
Estimate cost of equity and WACC
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
16th edition
125927716X, 978-1259687969, 1259687961, 978-1259277160
