Question
Spirialtex Inc., announced aggressive growth plans over the next three years. Below are the expected investments in fixed and working capital and corresponding pro forma
Spirialtex Inc., announced aggressive growth plans over the next three years. Below are the expected investments in fixed and working capital and corresponding pro forma income statements for each of the next 3 years.
Year123Tax rate40%40%40%Capital Expenditures253550Change in NWC567Shares Outstanding666 Sales (000,000)150200250 COGS75100125 Sales & Administrative Expense152025 Depreciation & Amortization505152Total Operating Costs140171202Operating Income (EBIT)102948Interest Expense456Earnings Before Taxes62442Taxes2.49.616.8Net Income3.6014.4025.20EPS0.602.404.20What is the free cash flow to the firm in Year 1?
Spirialtex has a corporate cost of capital of 11% and is expected to have a long run growth rate of 4%. What is the horizon value of the firm?
Assuming the firm has no short-term investments, what is the total value of the firm?
Spirialtex has 6 million common shares outstanding and $75 million in debt. What is the current equity value of the firms stock price?
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Master Your Trades Playbook Think In Probabilities By Mechanically Executing 30 Trades
Authors: Lee Beckett
1st Edition
B0CDNKS86Q
