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Use the following information to solve the questions below: Income Statement ( in millions ) of 2 0 2 3 Net Sales $ 8 0

Use the following information to solve the questions below:
Income Statement (in millions) of 2023
Net Sales $ 800.00
Cost of Goods sold $ 100.00
Depreciation $ 300.00
EBIT $ 400.00
Interest Expense $ 100.00
EBT $ 300.00
Tax $ 75.00
Net Income $ 225.00
Balance sheet (in millions) of 2023
LHS year year RHS year year
2022202320222023
Current Assets 600700 Current liab. 300400
Fixed Asset 700800 Fixed Debt 450100
Total equity 5501000
Total Asset 13001500 Total liab.+equity 13001500
Additionally, note the following:
There are 10 million shares outstanding
Free cash flow (FCF) and Earnings will grow at the constant rate of 2%
Firm's equity beta is 2.50
Risk-free rate is 4% and market return is 13%
Total debt market value is same as the book value of debt
QUESTION #1. Find the Free Cash Flow (FCF), using equation FCF = EBIT*(1-t)+ DEP - NCS - CHG IN NWC.
We find that FCF is
3500r 550 or 200 or 400 million dollars
QUESTION #2. Find the asset beta
It is approximately 1.09 or .95 or 1.82 or 1.34
QUESTION #3. Find the discount rate (k)
It is approximately 18.73%,15.25%,20.36%,11.33%
Stock value per share using FCF model is therefore approximately
Question Blank 4 of 9
choose your answer of 110.89,72.09,61.09,89.89 per share.
QUESTION #5 and #6. Find the book value per share and the earnings per share
Book value per share is
Question Blank 5 of 9
choose your answer... 100,60,90,150
and the earnings per share is
Question Blank 6 of 9
choose your answer... 32.522.512.542.5
QUESTION #7 and #8. Find the discount rate (k)
For the RIM, We need to use the
Question Blank 7 of 9
choose your answer... asset, equity, debt, market
beta to find the required rate of return, which is
Question Blank 8 of 9
choose your answer... 16.5%,20.5%,10.5%,26.5%
ind the stock value
Stock value per share using RIM model is therefore approximately
Question Blank 9 of 9
choose your answer... 25.5,45.5,85.5,65.5
per share.
.
.

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