Video Excel Online Structured Activity: New Stock Issue Bynum and Crumpton Inc. (5&C), a small jewelry manufacturer, has been successful and has enjoyed a positive growth trend. Now B&C is planning to go public with an issue of common stock, and it faces the problem of setting an appropriate price for the stock. The company and its investment banks believe that the proper procedure is to conduct a valuation and select several similar firms with publicly traded common stock and to make relevant comparisons Several jewelry manufacturers are reasonably similar to B&C with respect to product mix, asset composition, and debt/equity proportions of these companies, Abercrombe Jewelers and Gunter Fashions are most similar When analyzing the following data, assume that the most recent year has been reasonably "normal" in the sense that it was neither especially good nor especially bad in terms of sales, earnings, and free cash flows. Abercrombe is listed on the AMEX and Gunter on the NYSE, while BAC will be traded in the Nasdaq market. Company data Shares outstanding Price per share Earnings per share Free cash flow per share Book value per share Total assets Total debt Abercrombe 6 million $36.00 $2.20 $1.63 $17.00 $137 million $35 million Gunter 11 million $55.00 $3.13 $2.54 $22.00 $292 million $50 million BRC 500,000 NA $2.60 $2.00 $20.00 511 million 52 million The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below HIHI Goen soreadsheet Open spreadsheet a B&C is a dosely held corporation with only 500,000 shares outstanding, Free cash flows have been low and in some years negative due to BAC's recent high sales growth rates, but as its expansion phase comes to an end B&Cs free cash flows should increase. B&C anticipates the following free cash flows over the next 5 years Year 5 1 2 1,000,000 1,050,000 FCF 3 1,208,000 1.329,000 1,462,000 After Year 5, free cash flow growth will be stable at 7% per year. Currently, BRC has no non-operating assets, and its WACC 12%. Using the free cash flow valuation model, estimate B&C's intrinsic value of equity and intrinsic per share price. Do not found intermediate calculations. Round your answer for the value of equity to the nearest dollar. Round your answer for the value of equity per share to the nearest cent. $ Value of equity Per share value of equity $ b. Calculate debt to total assets, P/E, market to book, Pro and ROE for Abercrombo, Gunter, and BC For calculations that require a price for B&C we the per share price you obtained with the corporate valuation model in part a. Do not round intermediate calculations. Round your answers to two decimal places Abercrombe Gunter B&C D/A 9 P/E 96 Market/Book ROE P/FCF After Year 5. free cash flow growth will be stable at 7% per year. Currently, BaC has no non-toperating assets, and its WACC is 12%. Using the free cash flow valuation model, estimate B&C's intrinsic value of equity and intrinsic per share price. Do not round intermediate calculations. Round your answer for the value of equity to the nearest dollar. Round your answer for the value of equity per share to the nearest cent. Value of equity Per share value of equity 5 $ b. Calculate debt to total assets, P/E, market to book, P/FCF, and ROE for Abercrombe, Gunter and BBC. For calculations that require a price for BRC, use the per share price you obtained with the corporate valuation model in part a. Do not round Intermediate calculations. Round your answers to two decimal places Abercrombe Gunter BAC % D/A P/E MarketBook ROH P/FCF c. Using Abercrombe's and Gunter's p/e, Market/Book, and Price/Cratios, calculate the range of prices for BBC's stock that would be consistent with these to For example, if you multiply B&C's earnings per share by Abercrombe's P/E ratio you get a price. What range of prices do you get) Do not found intermediate calculations. Round your answers to the nearest cent The range of prices: from $ to $ Check My Work Reset