60.1K

Verified Solution

Link Copied!

11. You are given the following financial data. The firm has a 30% tax rate and 9% weighted average cost of capital (WACC).

Assets	2015	2016		Income Statement	2016
Cash	$7,200	$5,826		Sales	$4,667,520
AR	$280,960	$505,728		COGS	$2,241,000
Inventories	$572,160	$1,029,888		Other expenses	$576,000
Total CA	860,320	1,541,442		Deprec.	$93,568
Gross FA	$392,800	$962,360		EBIT	1,756,952
Less: Depr.	$116,960	210,528		Int. expense	$9,078
Net FA	275,840	751,832		Pre-tax earnings	1,747,874
Total assets	$1,136,160	$2,293,274		Taxes	524,362
				Net income	$1,223,512
Liabilities & Equity
Accts. payable	$116,480	$259,200
Accruals	$108,800	$227,968
Total CL	225,280	487,168
Long-term debt	$379,866	$51,579
Common stock	$368,000	$368,000
Ret. earnings	$163,014	1,386,526
Total equity	531,014	1,754,526
Total L&E	$1,136,160	$2,293,274

a. What is the firms free cash flow for 2016?

b. What is the firms economic value added (EVA) for 2016?

c. What is the firms return on invested capital (ROIC) for 2016?

d. What is the firms estimated stock price value if free cash flows are expected to grow at a constant 4.5% rate per year and the firm has 150,000 shares outstanding?

Show work with formulas please!

Answer & Explanation Solved by verified expert

See Answer