You have been hired by Shovein Asset Management Co. to be an equity analyst. Your job is to value
the following company and ultimately issue a BUY / HOLD / SELL recommendation for our clients.
COMPANY DATA:
Current Stock Price =			$40.00		Number of Outstanding Shares =		50,000
Total Assets =			$10,000,000		Total Equity =		$7,000,000
Last Dividend Paid / share =			$1.50		Forecasted Growth Rate (after yr. 5) =		3.0%
Tax Rate =			30%
Required Rate (WACC) =			8.0%
You have forecasted certain Income Statement and Balance Sheet information for the next 5 years:
			Year 1	Year 2	Year 3	Year 4	Year 5
Sales			$1,000,000	$1,100,000	$1,250,000	$1,400,000	$1,600,000
Operating Costs (excl. Dep.)			$600,000	$660,000	$750,000	$840,000	$960,000
Depreciation Expense			$150,000	$160,000	$175,000	$190,000	$200,000
Capital Expenditures			$175,000	$175,000	$200,000	$200,000	$220,000
Increase in Current Assets			$20,000	$25,000	$30,000	$40,000	$50,000
Increase in Current Liabilities			$15,000	$15,000	$20,000	$20,000	$30,000
What is your valuation using the DCF Model?