(typing is good , but excel is better for the explanation, thanks)

The following information pertains to Galaxy Interiors: GALAXY INTERIORS 2015 Income Statement ($ in millions) Net sales $ 21,415 Cost of goods sold 16,408 Depreciation 1,611 Earnings before interest and taxes $ 3,396 Interest paid 1,282 Taxable income $ 2,114 Less: Taxes 740 Net income $1,374 Cash Accounts receivable Inventory Total Netfixed assets 2014 $ 668 1,611 3,848 $ 6,127 17,489 GALAXY INTERIORS 2014 and 2015 Balance Sheets ($ in millions) 2015 $ 297 Accounts payable 1,527 Notes payable 2,947 Total $4,771 Long-term debt 17,107 Common stock Retaining earnings $ 21,878 Total liab. & equity 2014 $1,694 2,500 $ 4,194 9,800 7,500 2,122 $ 23,616 2015 $1,532 0 $1,532 10,650 7,000 2,696 $ 21,878 Total assets $ 23,616 Further assume the following: Galaxy's FCF and earnings will grow at a constant rate of 4% Galaxy's equity beta is 0.88 US 3 month T-bill rate is 3.2% S&P 500 market return is 6.61% Currently Galaxy Interiors do not pay dividends. There are 200 million shares outstanding . . . Further assume the following: Galaxy's FCF and earnings will grow at a constant rate of 4% Galaxy's equity beta is 0.88 US 3 month T-bill rate is 3.2% S&P 500 market return is 6.61% Currently Galaxy Interiors do not pay dividends. There are 200 million shares outstanding FYI, Tax rate = taxes / taxable income Book value of equity = common stock + retained earnings BO = book value per share Total debt = total current liabilities + total long-term debt NCS (Net Capital Spending) = change in Fixed assets + depreciation =Ending Fixed assets - Beginning fixed assets + depreciation Change in NWC (net working capital) = (CA - CL ) end (CA - CL ) beg FCF (Free cash flow) = EBIT *(1-tax rate) + Depreciation - NCS - change in NWC . Find the Galaxy Interior's current equity value using the Free Cash Flow (FCF) valuation model? Find the Galaxy Interior's current equity value using the Residual Income Model (RIM) valuation ? (5PTS) The following information pertains to Galaxy Interiors: GALAXY INTERIORS 2015 Income Statement ($ in millions) Net sales $ 21,415 Cost of goods sold 16,408 Depreciation 1,611 Earnings before interest and taxes $ 3,396 Interest paid 1,282 Taxable income $ 2,114 Less: Taxes 740 Net income $1,374 Cash Accounts receivable Inventory Total Netfixed assets 2014 $ 668 1,611 3,848 $ 6,127 17,489 GALAXY INTERIORS 2014 and 2015 Balance Sheets ($ in millions) 2015 $ 297 Accounts payable 1,527 Notes payable 2,947 Total $4,771 Long-term debt 17,107 Common stock Retaining earnings $ 21,878 Total liab. & equity 2014 $1,694 2,500 $ 4,194 9,800 7,500 2,122 $ 23,616 2015 $1,532 0 $1,532 10,650 7,000 2,696 $ 21,878 Total assets $ 23,616 Further assume the following: Galaxy's FCF and earnings will grow at a constant rate of 4% Galaxy's equity beta is 0.88 US 3 month T-bill rate is 3.2% S&P 500 market return is 6.61% Currently Galaxy Interiors do not pay dividends. There are 200 million shares outstanding . . . Further assume the following: Galaxy's FCF and earnings will grow at a constant rate of 4% Galaxy's equity beta is 0.88 US 3 month T-bill rate is 3.2% S&P 500 market return is 6.61% Currently Galaxy Interiors do not pay dividends. There are 200 million shares outstanding FYI, Tax rate = taxes / taxable income Book value of equity = common stock + retained earnings BO = book value per share Total debt = total current liabilities + total long-term debt NCS (Net Capital Spending) = change in Fixed assets + depreciation =Ending Fixed assets - Beginning fixed assets + depreciation Change in NWC (net working capital) = (CA - CL ) end (CA - CL ) beg FCF (Free cash flow) = EBIT *(1-tax rate) + Depreciation - NCS - change in NWC . Find the Galaxy Interior's current equity value using the Free Cash Flow (FCF) valuation model? Find the Galaxy Interior's current equity value using the Residual Income Model (RIM) valuation ? (5PTS)