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A Bayani Bakery’s most recent FCF was $48 million; the FCF is expected to grow at...

A Bayani Bakery’s most recent FCF was $48 million; the FCF is expected to grow at a constant rate of 6%. The firm’s WACC is 12%, and it has 15 million shares of common stock outstanding. The firm has $30 million in short-term investments, which it plans to liquidate and distribute to common shareholders via a stock repurchase; the firm has no other nonoperating assets. It has $368 million in debt and $60 million in preferred stock.

FCF = $48.0 million
g = 6%
WACC = 12%
nPrior = ? million
Short-term investments (Extra cash) = ? million
Note: All values in millions except per share data.
Prior Repurchase After Repurchase
Value of operations million
+ Value of nonoperating assets million
Total intrinsic value of firm million
− Debt million
− Preferred stock million
Intrinsic value of equity million
÷ Number of shares million
Intrinsic stock price
# shares repurchased =
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FIRST 2 IMAGES ARE NOTES, CALCULATIONS

Home nert Page Layout Formulas Data Review View dd-Ins E AutoSum Cut ー E ゴWrap Text Sort &Find & 2 ClearFe Select Edting aCopy ㆆ ▼ ▼ в 1 프 . Ej-., Δ. : rーー 逻锂函Merge & Center. $, % , 弼,8 Conditional Format eCell Insert Delete Format Formatting, as Table w styles. Format Painter Cells Number Alignment Clipboard T98 98 BAYANI 1 value of operations FCF(1+g)/(WACC-g) Value of operations = 48(1 +0.06)/(0.12-0.06) Value of operations = 100 101 102 103 104 105 106 107 108 109 110 848 MILLION 2 Immediately prior to repurchase, intrinsic value of equity total value of the firm value of operationsvalue of short term investment total value of the firm 84830 878 million intrinsic value of equity = total value of firm-debt-preferred stock intrinsic value of equity Ξ 878-368-60 450 3 intrinsic stock price intrinsic value of equity/no of common shares outstanding 450/1530.00 112 113 114 115 116 /4 4 no of shares repurchased 1 million 30 million/30- GM HPR AM TAX GROWTH SUST PREF AND DIV POLI CROSS OVER HEDGING MONEY MARKET CURRENCY LOAN - ARM MSI confidence!NDEX OCF CASH FLOW STAT erences: EV46 FO F トト - 05:16 14-01-2019Home nert Page Layout Formulas Data Review View dd-Ins s Cut aCopy Σ AutoSum ー E ゴWrap Text B า 프 . Ej-., Δ. : r_一 逻锂函Merge & Center. $, % , 弼,8 conditional Format . Cell Insert Delete Format Sort &Find & 2 ClearFe Select Edting Format Painter Formatting, as Table w styles. ▼ ㆆ ▼ Clipboard Alignment Number Cells T132 116 5 no of shares are repurchase 15 million 1 million 14 million 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 /4 く トト1 OCF CASH FLOW STAT N | FCF . ARM, MS,confidenceINDEX . CURRENCY . LOAN 6 after repurchase, intrinsic value as short term investments are sold off intrinsic value of equity value of operations - debt-preferred stock intrinsic value of equity 848- 368-60- 420 7 after repurchase, intrinsic stock price 420/14- 30.00 CROSS OVER HEDGING MONEY MARKET . GM HPR AM , TAX , GROWTH SUST , PREF AND DIV POLICY , erences: EV46 05:16 14-01-2019

Home nert Page Layout Formulas Data Review View dd-Ins s Cut aCopy E AutoSum ー E ゴWrap Text в 1 프 . Ej-., Δ. : rーー 逻锂函Merge & Center. $, % , 弼,8 C Conditional Format CeInsert Delete Format Formatting as Table Styles2 Clear Sort &Find & Format Painter Clipboard Alignment Number Cells Edting T143 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 /4 トト OCF CASH FLOW STAT ANSWER AS PER FORMAT n prior = short term investment- 15 million 30 million prior after value of operations value of non-operating assets total intrinsic value less : debt less : preferred stock intrinsic value of equity no of shares intrinsic stock price SHARES REPURCHASED 848 30 878 368 60 450 15 30 1 MILLION 420 14 30 FO F ARM MSI confidence!NDEX CURRENCY LOAN CROSS OVER HEDGING MONEY MARKET GM HPR AM TAX GROWTH SUST PREF AND DIV POLI - - erences: EV49 14-01-2019

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