We have the following information about a firm: 2017 2012 2017 2012 162 20 (1) 388,8 25 (2.8) 700 1250 (300) (499) (68) (60) (20) (25) (16) (18) (108) (259.2) 177.6 388,8 2.1143 4.469 84 87 (0.3) (05) (1) 1792 (5.3) 4.7 (1) 4094 Cash Flex From operation Net Income Depreciation Other non-cash items Cash effect of change in Account Receivables Account Payable Inventory Total Change from operation Erom investing Capital expenditure Acquisition Other investing activities Total Change from investing From financing Dividend paid Sale/purchase stock Increase borrowing Total Change from financing Total change in cash (34) (2) Income Statement Sales Cost of goods sold Selling, general, and administrative cost Depreciation Interest Taxes Net Income Earnings per share Common shares outstanding (millions) Balance Sheet Current Assets Cash Account Receivables Inventories Other Current Assets Total Current Assets Long Term Assets Land Building 2673 Equipment Less Accumulated Depreciation Other Long-Term assets Total Long-Term Assets Total Assets (16) (7) (6) (23) 750 40 60 31 287 320 694 91 16 496.4 (100) 360 250 353 205 5.5 24.9 (94.5) (119.1) 76.7 104 (20) 20 728 1009 25 36.4 12 734 Current Liabilities Account Payable Short Term Debt Other current liabilities Total Current Liabilities Long Term Liabilities Long Term Deby Deferred Taxes Total Long Term Liabilities Toral Liabilities Shareholder's Equity Total Liabilities and Equity 105 Required rate of return on equity: 16% (43) Required rate of return on debt: 67 T/14 Required rate of return on preferred stocks: 8% 731:4 12278 Target capital structure: 70% common stock, 25% debt and 5% preferred stocks Taxes: 40% 59 63 a/ You anticipate that the firm will grow at 30% 10 for 1 year.25% for 1 year, 20% for 2 years 132 and then 3 % thereafter Calculate the current value of a share of the firm's 285 stock using a two-stage FCFE discount moxtel b/ If the firm doesn't pay dividend the first few years 285 i/ Is it good or bad? 417 ii/Which method would you use to value the stock? 870.8 lil/ What can of tim would not pay dividends the 7227.8 first few years? 280 280 337 6556 1009