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3. You are given the duty of valuing your company shares. Expected net income of the next year (year 1) is 2,5 million TL, expected to grow 5% annually in the next 4 years (years 2-5), then will grow by 3% per year till infinity. You will have capex of 500,000TL in year 3, and will invest 200,000 TL each year as additional NWC in years 4 and 5. Cost of capital 12% (r)and firm has 10 million of debt. a. Calculate free cash flows. b. Calculate terminal value. C. What is the value of entire company? d. What is the value of equity? Assume no preferred stock. Round numbers to nearest integer. FCF=NI - Capex - NWC TV FCF 6/r-g6-00

3. You are given the duty of valuing your company shares. Expected net income of the next year (year 1) is 2,5 million TL, expected to grow 5% annually in the next 4 years (years 2-5), then will grow by 3% per year till infinity. You will have capex of 500,000TL in year 3, and will invest 200,000 TL each year as additional NWC in years 4 and 5. Cost of capital 12% (r)and firm has 10 million of debt. a. Calculate free cash flows. b. Calculate terminal value. C. What is the value of entire company? d. What is the value of equity? Assume no preferred stock. Round numbers to nearest integer. FCF=NI - Capex - NWC TV FCF 6/r-g6-00

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
Problem 4P
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3. You are given the duty of valuing your company shares. Expected net income of the next year (year 1) is 2,5 million TL, expected to grow 5% annually in the next 4 years (years 2-5), then will grow by 3% per year till infinity. You will have capex of 500,000TL in year 3, and will invest 200,000 TL each year as additional NWC in years 4 and 5. Cost of capital 12% (r)and firm has 10 million of debt. Calculate free cash flows. Calculate terminal value. C. What is the value of entire company ? d. What is the value of equity? Assume no preferred stock. Round numbers to nearest integer. a. b. FCF=NI - Capex - NWC TV=FCF 6/r-g6-00
Transcribed Image Text:3. You are given the duty of valuing your company shares. Expected net income of the next year (year 1) is 2,5 million TL, expected to grow 5% annually in the next 4 years (years 2-5), then will grow by 3% per year till infinity. You will have capex of 500,000TL in year 3, and will invest 200,000 TL each year as additional NWC in years 4 and 5. Cost of capital 12% (r)and firm has 10 million of debt. Calculate free cash flows. Calculate terminal value. C. What is the value of entire company ? d. What is the value of equity? Assume no preferred stock. Round numbers to nearest integer. a. b. FCF=NI - Capex - NWC TV=FCF 6/r-g6-00
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