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Truck System is a full-service truck leasing, maintenance, and rental firm with operations in Asia Pacific. The following are selected numbers from the financial statements
Truck System is a full-service truck leasing, maintenance, and rental firm with operations in Asia Pacific. The following are selected numbers from the financial statements for 2016 and 2017 (in millions). The firm had capital expenditures of $1,000 million in 2016 and $1,250 million in 2017. The working capital in 2015 was $34.8 million, and the total debt outstanding in 2015 was $1.75 billion. A. Estimate the free cash flows to equity in 2016 (3 points) B. Estimate the free cash flows to equity in 2017 (3 points) C. Do you agree that Truck system is in high growth phase? (2 points) Why? (2 points) D. What other approaches can you consider in estimation of the growth rate? ( 2 points)
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