StreamX.Spotify is looking at another potential acquisition in the music field. The music service, StreamX, has projected sales of $125 million next year. Costs (including depreciation) are expected to be 74 percent of sales and depreciation and net investment (PPE and working capital) are expected to be 3 percent and 5 percent of sales, respectively. Sales are expected to grow at 20 percent the following year, with the growth rate declining by 4 percentage points per year until the growth rate reaches 4 percent, where it is expected to then drop to 3 percent the next year and remain there indefinitely. StreamX has debt of $65 million outstanding . There are 1.5 million shares of stock outstanding and investors require a return of 12 percent on the company's stock. The corporate tax rate is 25 percent. Show all steps in your process to answer the following questions. What is your estimate of the value of StreamX today? In answering, provide an explicit detailing of the following: The Operating Cash flow in T1 and T2. The Horizon value at the end of the non-constant growth period. Your estimate of the Value of Operations. Your estimate of the Equity value per share.

Use Excel to show work please.

6 7 8 9 Answer the Questions asked in the problem Show the steps in your solution below the question (starting in row 29); highlight your answer below, and place it in the designated spot for each (rows 9 - 27) Question 1: _That is the operating CF in T1 and T2? OpCF, T1= OpCF, T2= Question 2: Estimate the Horizon value at the end of the non-constant growth period. Horizon Value? 10 11 12 13 14 15 16 17 18 19 20 21 22 Question 3: Estimate the value of operations at To Value of Operations, To= Question 4: Estimate the equity value per share at To. Equity Value/shr, To 23 24 25