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You are valuing Soda City Inc. It has $150 million of debt, $70 million of cash, and 200 million shares outstanding. You estimate its cost
You are valuing Soda City Inc. It has $150 million of debt, $70 million of cash, and 200 million shares outstanding. You estimate its cost of capital is 8.0%. You forecast that it will generate revenues of $740 million and $760 million over the next two years. Projected operating profit margin is 40%, tax rate is 20%, reinvestment rate is 60%, and terminal exit value multiple at the end of year 2 is 8. What is your estimate of its share price?
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