2. The following are selected numbers (in millions of dollars) from the financial statements of company...

 

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2. The following are selected numbers (in millions of dollars) from the financial statements of company ABC for 2021 and 2022. 2021 Revenues $5,192.0 (Less) Operating Expenses ($3,678.5) (Less) Depreciation ($573.5) EBIT $940.0 (Less) Interest Expenses (Less) Taxes Net Income Working Capital Capital expenditure Total Debt TH ($170.0) ($252.1) $517.9 $92.0 $800.0 $2,000.0 2022 $5,400.0 ($3848.0) ($580.0) $972.0 ($172.0) ($270.0) $530.0 $370.0 $750.0 $2,200.0 The firm's cost of debt is 4%. The beta of the stock is 1.05, and there are 40 million shares outstanding (trading at $60 per share). The risk-free rate of return is 2%, the risk premium on the market portfolio is 9%. The firm expects FCFF to grow at 6.5% a year from 2023 to 2026, after which the growth rate is expected to drop to 3%. Estimate the value per share at the beginning of 2023 using FCFF approach. 2. The following are selected numbers (in millions of dollars) from the financial statements of company ABC for 2021 and 2022. 2021 Revenues $5,192.0 (Less) Operating Expenses ($3,678.5) (Less) Depreciation ($573.5) EBIT $940.0 (Less) Interest Expenses (Less) Taxes Net Income Working Capital Capital expenditure Total Debt TH ($170.0) ($252.1) $517.9 $92.0 $800.0 $2,000.0 2022 $5,400.0 ($3848.0) ($580.0) $972.0 ($172.0) ($270.0) $530.0 $370.0 $750.0 $2,200.0 The firm's cost of debt is 4%. The beta of the stock is 1.05, and there are 40 million shares outstanding (trading at $60 per share). The risk-free rate of return is 2%, the risk premium on the market portfolio is 9%. The firm expects FCFF to grow at 6.5% a year from 2023 to 2026, after which the growth rate is expected to drop to 3%. Estimate the value per share at the beginning of 2023 using FCFF approach.