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At the end of 2021, ABC company had total sales $22 million. They had 1.3 million shares outstanding. We expect sales growth to be 6% per year for the next 3 years. After that we expect sales growth to be 3% into perpetuity. The company's profit margin is 15% and the company has a return on equity of 25%. The cost of equity is 12%. Forecast: 1) Sales per Share 2) Profit (earnings per share) 3) Free cash flow to equity (per share) for the next 3 years, along with a terminal value beyond the three years. 4) Determine the intrinsic value of the stock. 5) How much of the intrinsic value comes from our estimate of future growth (PVGO)? FCFF Given the following information about a company: . . O . . . . . Sales for the year that just ended: $21 billion Sales growth: o Sales growth for next 3 years: 7% Sales growth after Year 3: 3.5% Operating margins = 21% Tax rate = 24 percent Net margins = 12% Market Value of Debt = $4 billion Pre-tax cost of debt = 5.25% Number of shares outstanding = 2 billion Book value of equity: $35 billion Book value of assets: $40 billion Percentage of NOPAT that must be reinvested: Reinvestment rate Years 1-3: 32% Reinvestment rate after Year 3: 18% Market value of equity: $36 billion Cost of Equity = 12% . . O O . . Forecast: Sales, EBIT, Taxes, NOPAT, Reinvestment, FCFF and terminal value. Calculate the WACC and then calculate present values to determine the firm's Enterprise Value (EV). From EV, determine the intrinsic value per share of stock. Be careful to maintain the same weight on debt and equity when calculating the intrinsic value. At the end of 2021, ABC company had total sales $22 million. They had 1.3 million shares outstanding. We expect sales growth to be 6% per year for the next 3 years. After that we expect sales growth to be 3% into perpetuity. The company's profit margin is 15% and the company has a return on equity of 25%. The cost of equity is 12%. Forecast: 1) Sales per Share 2) Profit (earnings per share) 3) Free cash flow to equity (per share) for the next 3 years, along with a terminal value beyond the three years. 4) Determine the intrinsic value of the stock. 5) How much of the intrinsic value comes from our estimate of future growth (PVGO)? FCFF Given the following information about a company: . . O . . . . . Sales for the year that just ended: $21 billion Sales growth: o Sales growth for next 3 years: 7% Sales growth after Year 3: 3.5% Operating margins = 21% Tax rate = 24 percent Net margins = 12% Market Value of Debt = $4 billion Pre-tax cost of debt = 5.25% Number of shares outstanding = 2 billion Book value of equity: $35 billion Book value of assets: $40 billion Percentage of NOPAT that must be reinvested: Reinvestment rate Years 1-3: 32% Reinvestment rate after Year 3: 18% Market value of equity: $36 billion Cost of Equity = 12% . . O O . . Forecast: Sales, EBIT, Taxes, NOPAT, Reinvestment, FCFF and terminal value. Calculate the WACC and then calculate present values to determine the firm's Enterprise Value (EV). From EV, determine the intrinsic value per share of stock. Be careful to maintain the same weight on debt and equity when calculating the intrinsic value