Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Using the set of assumptions to estimate the stock value per share EBIT $40.0 million Year 1 Growing at 15.00% CapEx $20.0 million Year 1
Using the set of assumptions to estimate the stock value per share | ||||||||
EBIT | $40.0 | million | Year 1 | Growing at | 15.00% | |||
CapEx | $20.0 | million | Year 1 | Growing at | 10.00% | |||
Depreciation | $5.0 | million per year | ||||||
Increased working capital | $6.0 | million | Fixed over 5 years | |||||
Shares outstanding | 2.0 | million | ||||||
Tax rate | 21.00% | |||||||
WACC | 12.50% | |||||||
Terminal growth rate | 5.00% | |||||||
Value of debt | $80.0 | million | ||||||
1 | 2 | 3 | 4 | 5 | 6 | |||
EBIT | 15.00% | |||||||
Tax | 21.00% | |||||||
Earnings After Tax | ||||||||
Depreciation | ||||||||
Cap expenditures | 10.00% | |||||||
Increase in Working Capital | ||||||||
Free Cash Flow (FCF) | ||||||||
WACC | 12.50% | |||||||
Terminal growth rate | 5.00% | |||||||
Terminal value | ||||||||
Estimated value of firm | ||||||||
Value of debt | ||||||||
Value of equity | ||||||||
Shares outstanding | ||||||||
Estimated value per share |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started