Question
Tiara Wings Ltd is a firm that makes Tiaras and chicken wings. The firm has projected its future growth in the table below. Assuming this
Tiara Wings Ltd is a firm that makes Tiaras and chicken wings. The firm has projected its future growth in the table below. Assuming this table is correct, compute the value per share. The firm has WACC of 12%, the long-run growth rate after year 5 is 4%. The firm has $5 million in debt and 865,000 shares outstanding.
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| -1 | 0 | 1 | 2 | 3 | 4 | 5 |
| 1. | Sales | 39,357.0 | 40,123.0 | 36,351.0 | 30,155.0 | 28,345.0 | 29,982.0 | 30,450.0 |
| 2. | Cost of Goods Sold | 18,564.0 | 22,879.0 | 21,678.0 | 17,560.0 | 16,459.0 | 15,631.0 | 14,987.0 |
| 3. | Other Costs | 7,645.0 | 8,025.0 | 6,797.0 | 5,078.0 | 4,678.0 | 4,987.0 | 5,134.0 |
| 4. | EBITDA (1 2 3) | 13,148.0 | 9,219.0 | 7,876.0 | 7,517.0 | 7,208.0 | 9,364.0 | 10,329.0 |
| 5. | Depreciation and Amortization | 5,745.0 | 5,678.0 | 5,890.0 | 5,670.0 | 5,908.0 | 6,107.0 | 5,908.0 |
| 6. | EBIT (pretax profit) (4 5) | 7,403.0 | 3,541.0 | 1,986.0 | 1,847.0 | 1,300.0 | 3,257.0 | 4,421.0 |
| 7. | Tax at 35% | 2,591.1 | 1,239.4 | 695.1 | 646.5 | 455.0 | 1,140.0 | 1,547.4 |
| 8. | Profit after Tax (6 7) | 4,811.0 | 2,301.7 | 1,290.9 | 1,200.6 | 845.0 | 2,117.1 | 2,873.7 |
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| 9. | Change in Working Capital | 566.0 | 784.0 | -54.0 | -342.0 | -245.0 | 127.0 | 235.0 |
| 10. | Investment (change in gross PP&E) |
6,467.0 | 6,547.0 | 7,345.0 | 5,398.0 | 5,470.0 | 6,420.0 | 6,598.0
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Financial Management Principles And Practice
Authors: Timothy Gallagher
7th Edition
0996095462, 978-0996095464
