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Estimating Share Value Using the DCF Model Following are forecasts of Illinois Tool Works Inc. sales,...
Estimating Share Value Using the DCF Model Following are forecasts of Target Corporation's sales, net operating...
Estimating Share Value Using the DCF Model Following are forecasts of Target Corporation's sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of January 30, 2016 Reported Horizon Period Terminal $ millions 2016 Period 2017 2018 2019 2020 Sales $73,785 $75,261 $76,766 $78,301 $79,867 $80,666 3,630 NOPAT 3,312 3,387 3,454 3,524 3,594 23,443 NOA 21,445 21,872 22,309 22,755 23,210 Answer the following requirements assuming a terminal period growth rate of 1%, a discount rate (WACC) of...
Following are forecasts of Target Corporation's sales, net operating profit after tax (NOPAT), and net operating...
Following are forecasts of Target Corporation's sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of January 30, 2016. Reported Horizon Period Terminal $ millions 2016 2017 2018 2019 2020 Period Sales $74,229 $75,714 $77,228 $78,773 $80,348 $81,151 NOPAT 3,340 3,407 3,475 3,545 3,616 3,652 NOA 22,269 22,714 23,168 23,632 24,104 24,345 Answer the following requirement assuming a terminal period growth rate of 1%, a discount rate (WACC) of 6%, common shares outstanding of 602 million,...
please show work neatly and explain! 10. Assume the following expected free cash flows for Peterson...
please show work neatly and explain!
10. Assume the following expected free cash flows for Peterson Corporation for 2017: Current Forecast Horizon Terminal 2017 2018 2019 2020 2021 Year Free cash flows to the firm (FCFF) $4,651 54,884 $5,128 $5,384 $5,653 $5,766 The company has net nonoperating obligations (NNO) of $12,000 and 3,000 shares outstanding Calculate the per share stock price using the FCFF information above, a discount rate of 7%, and a terminal growth rate of 2%.
Forecasting and Estimating Share Value Using the DCF Model Following are the income statement and...
Forecasting and Estimating Share Value Using the DCF Model Following are the income statement and balance sheet for Intel Corporation. INTEL CORPORATION Consolidated Statements of Income Year Ended (In millions) Dec. 25, 2010 Dec. 26, 2009 Dec. 27, 2008 Net revenue $ 44,123 $ 35,127 $ 37,586 Cost of sales 15,132 15,566 16,742 Gross margin 28,991 19,561 20,844 Research and development 6,576 5,653 5,722 Marketing, general and administrative 6,309 7,931 5,452 Restructuring and asset impairment charges -- 231 710 Amortization...
Forecasting and Estimating Share Value Using the DCF Model Following are the income statement and balance...
Forecasting and Estimating Share Value Using the DCF Model Following are the income statement and balance sheet for Intel Corporation. INTEL CORPORATION Consolidated Statements of Income Year Ended (In millions) Dec. 25, 2010 Dec. 26, 2009 Dec. 27, 2008 Net revenue $ 44,423 $ 35,127 $ 37,586 Cost of sales 15,132 15,566 16,742 Gross margin 29,291 19,561 20,844 Research and development 6,576 5,653 5,722 Marketing, general and administrative 6,309 7,931 5,452 Restructuring and asset impairment charges -- 231 710 Amortization...
Forecasting with the Parsimonious Method and Estimating Share Value Using the DCF Model Following are the...
Forecasting with the Parsimonious Method and Estimating Share Value Using the DCF Model Following are the income statement and balance sheet for Cisco Sytems for the year ended July 30, 2016. Cisco Sytems Consolidated Statements of Income Years Ended December ($ millions) July 30, 2016 July 25, 2015 Revenue Product $37,254 $37,750 Service 11,993 11,411 Total revenue 49,247 49,161 Cost of sales Product 14,161 15,377 Service 4,126 4,103 Total cost of sales 18,287 19,480 Gross margin 30,960 29,681 Operating expenses...
You are instructed by your client to value the target company your client is considering acquiring...
You are instructed by your client to value the target company your client is considering acquiring using market-based valuation methods. Below is a summary of the financial information (dollars in millions) target company and three other companies, Company A, Company B, and Company C that you have identified as potentially comparable companies (a) as at, and for the year ended, 31 March 2018 for the Comparable companies Company Company Company C Target A Company value Equity value Net operating assets...
show work and be neat please 9. Two public companies (Jensen and Jackson) operate in the...
show work and be neat please
9. Two public companies (Jensen and Jackson) operate in the same industry, will generate exactly the same operating profit, and have identical net operating assets. What is the weighted average cost of capital for each company? Which company will have a lower stock price? Jensen Total Debt Total Shareholder Equity Cost of Debt Cost of Equity $64,000 3.5% 5.5% Jackson $32,000 $32,000 5.0% 7.0% 10. Assume the following expected free cash flows for Peterson...
Basic Stock Valuation: Free Cash Flow Valuation Model The recognition that dividends are dependent on earnings,...
Basic Stock Valuation: Free Cash Flow Valuation Model The recognition that dividends are dependent on earnings, so a reliable dividend forecast is based on an underlying forecast of the firm's future sales, costs and capital requirements, has led to an alternative stock valuation approach, known as the free cash flow valuation model. The market value of a firm is equal to the present value of its expected future free cash flows: Market value of company FCF (1+WACC) + FCF (1+WACC)...
Analysis and Interpretation of Profitability Balance sheets and income statements for Costco Wholesale Corporation follow. Costco...
Analysis and Interpretation of Profitability Balance sheets and income statements for Costco Wholesale Corporation follow. Costco Wholesale Corporation Consolidated Statements of Earnings For Fiscal Years Ended ($ millions) August 28, 2016 August 30, 2015 August 31, 2014 Revenue Net Sales $116,073 $113,666 $110,212 Membership fees 2,646 2,533 2,428 Total revenue 118,719 116,199 112,640 Operating expenses Merchandise costs 102,901 101,065 98,458 Selling, general and administrative 12,068 11,445 10,899 Preopening expenses 63 Operating Income 3,672 3,624 3,220 Other income (expense) Interest expense...
Estimating Share Value Using the DCF Model Following are forecasts of Target Corporation's sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of January 30, 2016 Reported Horizon Period Terminal $ millions 2016 Period 2017 2018 2019 2020 Sales $73,785 $75,261 $76,766 $78,301 $79,867 $80,666 3,630 NOPAT 3,312 3,387 3,454 3,524 3,594 23,443 NOA 21,445 21,872 22,309 22,755 23,210 Answer the following requirements assuming a terminal period growth rate of 1%, a discount rate (WACC) of...
please show work neatly and explain!
10. Assume the following expected free cash flows for Peterson Corporation for 2017: Current Forecast Horizon Terminal 2017 2018 2019 2020 2021 Year Free cash flows to the firm (FCFF) $4,651 54,884 $5,128 $5,384 $5,653 $5,766 The company has net nonoperating obligations (NNO) of $12,000 and 3,000 shares outstanding Calculate the per share stock price using the FCFF information above, a discount rate of 7%, and a terminal growth rate of 2%.
You are instructed by your client to value the target company your client is considering acquiring using market-based valuation methods. Below is a summary of the financial information (dollars in millions) target company and three other companies, Company A, Company B, and Company C that you have identified as potentially comparable companies (a) as at, and for the year ended, 31 March 2018 for the Comparable companies Company Company Company C Target A Company value Equity value Net operating assets...
show work and be neat please
9. Two public companies (Jensen and Jackson) operate in the same industry, will generate exactly the same operating profit, and have identical net operating assets. What is the weighted average cost of capital for each company? Which company will have a lower stock price? Jensen Total Debt Total Shareholder Equity Cost of Debt Cost of Equity $64,000 3.5% 5.5% Jackson $32,000 $32,000 5.0% 7.0% 10. Assume the following expected free cash flows for Peterson...
Basic Stock Valuation: Free Cash Flow Valuation Model The recognition that dividends are dependent on earnings, so a reliable dividend forecast is based on an underlying forecast of the firm's future sales, costs and capital requirements, has led to an alternative stock valuation approach, known as the free cash flow valuation model. The market value of a firm is equal to the present value of its expected future free cash flows: Market value of company FCF (1+WACC) + FCF (1+WACC)...
Analysis and Interpretation of Profitability Balance sheets and income statements for Costco Wholesale Corporation follow. Costco Wholesale Corporation Consolidated Statements of Earnings For Fiscal Years Ended ($ millions) August 28, 2016 August 30, 2015 August 31, 2014 Revenue Net Sales $116,073 $113,666 $110,212 Membership fees 2,646 2,533 2,428 Total revenue 118,719 116,199 112,640 Operating expenses Merchandise costs 102,901 101,065 98,458 Selling, general and administrative 12,068 11,445 10,899 Preopening expenses 63 Operating Income 3,672 3,624 3,220 Other income (expense) Interest expense...
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