1. Using the Data for Hosaka Corp (HC), find the intrinsic value of a share of HC. Assume it has a 11/12 fiscal year end.

DATA FOR HOSAKA CORP

• Projected Sales for 2021: $1,000,000
• Gross Profit Margin: 80%
• Operating expenses (excluding Depreciation): 15% of sales
• Depreciation for 2021: $100,000
• Interest Expense $120,000/year
• Tax: 25%
• Capital Expenditures for 2020: $300,000
• Investment in Working Capital for 2019: $80,000
• Sales are expected to grow at 20% per year for the next 4 years (after 2020)
• Capital Expenditures, Depreciation, and Investment in Working Capital are expected to grow at 15% per yearfor the next 4 years
• Hosaka has an 8% cost of capital, $2 Million in Debt, and 1 Million shares outstanding
• Hosaka currently has a Enterprise Value/EBIT multiple of 10, and that is expected to remain stable