1. To continue with Sundance, Abby Perez, CFA, has been directed to determine the value of Sundances stock using the free cash flow to equity (FCFE) model. Perez believes that Sundances FCFE will grow at 27% for two years and 13% thereafter. Capital expenditures, depreciation, and working capital are all expected to increase proportional with FCFE.
   1. Calculate the FCFE per share for 2022

A B D E F C 1 Sundance financial statements ($million) 2 3 Income Statement 2022 nmn 2021 474 598 Required rate of return Growth rate of industry Industry P/E ratio 14% 13% 26 23 $ $ $ $ $ $ 20 368 86 $ 460 115 26 35 60 $ 80 18 24 $ $ $ 0.71 $ 0.21 $ 0.95 0.29 84 84 4 Revenue 5 Depreciation 6 Other operating costs 7 Income before taxes 8 Taxes 9 Net income 10 11 Dividends 12 Earnings per share 13 Dividend per share 14 Shares outstanding (millions) 15 16 Balance Sheet 17 Current assets 18 Net property, plant, and equip. 19 Total assets 20 21 Current liabilities 22 Long-term debt 23 Total liabilities 24 Shareholder's equity 25 Total liab & equity 26 27 Capital expenditures 28 $ $ $ 2021 201 $ 474 $ 675 $ 2022 326 489 815 141 $ $ $ $ $ 57 $ $ 57 $ 618 $ 675 $ 141 674 815 $ 34 $ 38 A B D E F C 1 Sundance financial statements ($million) 2 3 Income Statement 2022 nmn 2021 474 598 Required rate of return Growth rate of industry Industry P/E ratio 14% 13% 26 23 $ $ $ $ $ $ 20 368 86 $ 460 115 26 35 60 $ 80 18 24 $ $ $ 0.71 $ 0.21 $ 0.95 0.29 84 84 4 Revenue 5 Depreciation 6 Other operating costs 7 Income before taxes 8 Taxes 9 Net income 10 11 Dividends 12 Earnings per share 13 Dividend per share 14 Shares outstanding (millions) 15 16 Balance Sheet 17 Current assets 18 Net property, plant, and equip. 19 Total assets 20 21 Current liabilities 22 Long-term debt 23 Total liabilities 24 Shareholder's equity 25 Total liab & equity 26 27 Capital expenditures 28 $ $ $ 2021 201 $ 474 $ 675 $ 2022 326 489 815 141 $ $ $ $ $ 57 $ $ 57 $ 618 $ 675 $ 141 674 815 $ 34 $ 38