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If there are 500 million shares outstanding, use the following information to find a fair value for Galaxy Interiors stock using the Free Cash Flow (FCF) model.

	GALAXY INTERIORS INCOME STATEMENT
	($ in millions)
	NET SALES	$ 35,000
	COST OF GOODS SOLD	$ 17,500
	DEPRECIATION	$ 2,500
	EARNINGS BEFORE INTEREST AND TAXES (EBIT)	$ 15,000
	INTEREST EXPENSE	$ 1,300
	TAXABLE INCOME (EARNINGS BEFORE TAXES; EBT)	$ 13,700
	TAXES (0.30)	$ 4,110
	NET INCOME	$ 9,590

GALAXY INTERIORS BALANCE SHEET (PAST & CURRENT)
($ IN MILLIONS)
	PAST YR	CURRENT YR			PAST YR	CURRENT YR
CURRENT ASSETS	5500	6700		CURRENT LIABILITIES	2200	3000
(NET) FIXED ASSETS	25000	27000		LONG TERM DEBT	9300	9700
TOTAL ASSETS	30500	33700		TOTAL EQUITY	19000	21000
				TOTAL LIAB & EQUITY	30500	33700

Also, assume the following:

• Free cash flow (FCF) will grow at 2.5%
• Galaxy's equity beta is 1.50
• Risk-free rate is 3% and market return is 13%
• Currently, Galaxy is not paying any dividends
• Book value of total debt is equal to the market value of debt
• further note that, FCF (Free cash flow) = EBIT*(1-t) + depreciation - NCS - change in NWC

Multiple choice answer:

		approx. $125
		approx. $199
		approx. $375
		approx. $258

The answer should be one of the 4 numbers above

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