You are evaluating a firm with 109.5M shares outstanding at a current market price of $48.50/share. The firm has 16 M employee stock options outstanding with a weighted average exercise price of $38 per share, 6 M employee stock options outstanding with a weighted average exercise price of $50 per share, 50,000 shares of non-vested restricted stock, and 750,000 non-vested service- based RSUS (restricted stock units). The firm also has $850 M of convertible debt outstanding. Each $1000 face value bond is convertible into 22 shares of common equity. What is the number of fully-diluted shares for this target firm? You are conducting a DCF valuation. The firm had revenue of $5.5 billion last year and you expect 5% growth in revenue over the next three years. You have estimated that cost of sales (including operating lease expenses) is 56% of sales, SG&A is 25% of sales, depreciation is 4% of sales. The footnotes of the financial statement reveal that the firm has a significant past and on-going reliance on operating leases for all of its warehousing facilities. It reports lease rental obligations of $200 M per year for the coming 5 years, and $500 M total obligations beyond year 5. The original cost of the leased assets was $1,200 M and, if they had been purchased, you estimate the warehouses would have been depreciated straight line 25 years. a. Complete the following forecasts of lease-adjusted operating income: 1 | 2 | 3 Revenues Cost of Sales SG&A Depreciation Net Operating Income Operating Lease Expense Depreciation (Oper Leases) Adjusted Operating Income Based on the following balance sheet, if operating cash is estimated to be 1.5% of sales, what is the firm's current level of operating NWC? Cash $ 200 Accounts Payable $ 135 Marketable Sec 25 150 Short-term Notes 280 Current portion of LT Debt Accounts Receivable 100 Inventories 670 Total Current Liabilities 260 Other Current Assets 1,100 130 Long-term Debt 1,430 Total Current Assets PP&E 3,000 Accum. Depreciation | 1,400 Shareholders' Equity 2,970 Net PP&E 1,600 Total Liab + Equity 4,330 Other Assets 1,300 Total Assets 4,330 If the appropriate discount rate for evaluating the lease obligations is 3.3% and you treat the lease obligations beyond year 5 as all occurring at time 6, what is the value of the firm's total debt? You are evaluating a firm with 109.5M shares outstanding at a current market price of $48.50/share. The firm has 16 M employee stock options outstanding with a weighted average exercise price of $38 per share, 6 M employee stock options outstanding with a weighted average exercise price of $50 per share, 50,000 shares of non-vested restricted stock, and 750,000 non-vested service- based RSUS (restricted stock units). The firm also has $850 M of convertible debt outstanding. Each $1000 face value bond is convertible into 22 shares of common equity. What is the number of fully-diluted shares for this target firm? You are conducting a DCF valuation. The firm had revenue of $5.5 billion last year and you expect 5% growth in revenue over the next three years. You have estimated that cost of sales (including operating lease expenses) is 56% of sales, SG&A is 25% of sales, depreciation is 4% of sales. The footnotes of the financial statement reveal that the firm has a significant past and on-going reliance on operating leases for all of its warehousing facilities. It reports lease rental obligations of $200 M per year for the coming 5 years, and $500 M total obligations beyond year 5. The original cost of the leased assets was $1,200 M and, if they had been purchased, you estimate the warehouses would have been depreciated straight line 25 years. a. Complete the following forecasts of lease-adjusted operating income: 1 | 2 | 3 Revenues Cost of Sales SG&A Depreciation Net Operating Income Operating Lease Expense Depreciation (Oper Leases) Adjusted Operating Income Based on the following balance sheet, if operating cash is estimated to be 1.5% of sales, what is the firm's current level of operating NWC? Cash $ 200 Accounts Payable $ 135 Marketable Sec 25 150 Short-term Notes 280 Current portion of LT Debt Accounts Receivable 100 Inventories 670 Total Current Liabilities 260 Other Current Assets 1,100 130 Long-term Debt 1,430 Total Current Assets PP&E 3,000 Accum. Depreciation | 1,400 Shareholders' Equity 2,970 Net PP&E 1,600 Total Liab + Equity 4,330 Other Assets 1,300 Total Assets 4,330 If the appropriate discount rate for evaluating the lease obligations is 3.3% and you treat the lease obligations beyond year 5 as all occurring at time 6, what is the value of the firm's total debt
