Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

WaNaBe shares are not traded on the securities market, but the company would like to expand its ownership base. The current owners have 5 0

WaNaBe shares are not traded on the securities market, but the company would like to expand its ownership base. The current owners have 50,000 shares, part of which they want to sell to the new owner. First, however, an idea of the share price should be formed. The company has had net debt of 5500 k, on which it has paid interest of 5% this year. The company's operating profit is 2730 k. Tax rate: 20%.
The company now plans to change its financing policy and going forward to keep net debt to enterprise value ratiosat 20%. WaNaBe's weighted average cost of capital (WACC) is then estimated to be 8%.
In addition, the following estimates have been made for next year: The company's operating profit will remain at the current level at EUR 2730 k, net investments EUR 781 k and net working capital growth EUR 380 k.
In subsequent years, the company is no longer expected to grow, so the annual operating profit estimate does not change, net working capital does not increase, and net investments are zero.
Calculate next year's net profit excluding debt (UnleveredNet Income)[k] In other words, what would be net profit if the company were debt-free?
Calculate Wanabe's Net Income for next year [k].
Calculate WaNaBe's Enterprise Value [k].
Calculate the value of WaNaBe's share [xx.xx /pc].
After next year, the investor group would like to buy WaNaBe shares at a price of 340.00/share. What percentage do they expect WaNaBe's free cash flow to grow each year?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Banker To The World

Authors: William Rhodes

1st Edition

0071704256, 978-0071704250

More Books

Students also viewed these Finance questions