Gandhara Inc. reported a Net income of $ 800 million last year, after an interest...
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Gandhara Inc. reported a Net income of $ 800 million last year, after an interest expense of $ 350 million. (Tax rate is 36 %). Depreciation for the year was $ 980 million, with a Capital spending of $ 1.2 billion. The Firm's Debt outstanding is $ 4 billion, with a yield of 8 %. The book value of its Equity is S 5 billion, with a beta of 1.08, and there were # 200 million shares outstanding. Gandhara Inc. paid 40 % of its earnings as dividends. Its Working Capital is negligible. Thr Risk free rate is 7%, and Market return is 12.5 %. Required: 1. Estimate the Free Cash flow to the Firm last year. 2. Estimate the value of the Firm at end of last year. 3. Estimate the value of Equity and Value per share as of last year
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