Randon Inc.'s 2021 pro forma and 2020 actual balance sheets and income statements are as shown. Analysts
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Question:
Randon Inc.'s 2021 pro forma and 2020 actual balance sheets and income statements are as shown. Analysts project that the company's free cash flows for years 2022 to 2025 are as follows, and that after 2025 FCFs are expected to grow at a constant 7.3% annually. Randon Inc. WACC is 12.6%.
End of Year 2021 2022 2023 2024 2025
FCF ? -$9,500M $880M $4,200M $11,300M
- Calculate the 2021 estimated free cash flow for Randon Inc.
- Calculate the 2025 horizon value for Randon Inc.
- Calculate the value of operation for Randon Inc. at the end of year 2020 (i.e. at year 0).
- Calculate the value of firm for Randon Inc. at the end of year 2020.
- Suppose Randon Inc. has 3 million shares of common stock outstanding. Calculate the estimated intrinsic value per share for their common stock.
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1285190907
8th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
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