Develop a full pro forma statement to arrive at each answer. Include the full pro-forma statement as part of your work! 3. Guadalajara & Blings is a firm that makes Mexican food and princess tiaras. It is a competitor of the firm In the previous problem, so It will have the same cost of capital and the same long-term growth rate (in fact, your keen analysis should notice something fishy - Its balance sheet looks very similar to its competitor). For the sake of simplicity, we will also assume that it has the same cost of equity (although In reality, this will not be the case if It has a different debt ratio). This firm has 500,000 shares of stock outstanding. The accounting statement is in thousands of dollars on the following pages. Assuming that the projections are correct and that there are no asset sales other than those lit book value, compute the stock price per share using: a) the WACC/FCF method b) the Flow-to-Equity method You are already given a pro-forma statement for this problem, but you still need to show how you arrived at your pro-forma cash flows. 2 3 WN 1 2 3. 4. S. 6. 7. & Sales Cost of Goods Sold Other Costs EBITDA (1-2-3) Depreciation and Amortization EBIT (pretax profit) (4-5) Tax at 35% Profit after Tax (6-7) -1 0 1 39,357.0 40,123.0 36,3510 18,564.0 22,879.0 21,678.0 7,645.0 8,025.0 6,797.0 13,148.0 9,219.0 7,876.0 5,745.0 5,678.0 5,890.0 7,403.0 3,5410 1.986.0 2,591.1 1,239.4 695.1 4,811.0 2,301.7 1,290.9 30,155.0 17,560.0 5,078.0 7,517.0 5,670.0 1,847.0 646.5 1,200.6 28,345.0 16,459.0 4,678.0 7,208.0 5,908.0 1,300.0 455.0 845.0 5 29,982.0 30,450.0 15,631.0 14.987.0 4,987.0 5,134.0 9,364.0 10,329.0 6,107.0 5,908.0 3,257.0 4,4210 1,140.0 1,5474 2,117.1 2,873.7 566.0 784.0 -54.0 -342.0 -245.0 127.0 235.0 9. Change in Working Capital 10. Investment (change in gross PP&E) 6,467,0 6,547.0 7,345.0 5,398.0 5,470.0 6,420.0 6,598.0 End of Year 0 1,350 940 L 2.360 4,650 9,850 14.500 Balance Sheet Assets Current assets: Cash and cash equivalents Accounts receivable Inventory Total current assets Net Fixed Assets Total assets Uabilities and stockholders' equity Current liabilities: Accounts payable Short/Current Long Term Debt Total current liabilities Long Term Debt Capital Leases Deferred Taxes Total abilities Stockholders' equity Common stock & Pald-in Capital Retained Earnings Total stockholders' equity Total liabilities and equity ge 2 of 3 974 words English (United States) stv A 1,920 1,500 3.420 2,800 700 1.500 8,420 3,500 2,580 6,080 14.500 Focus 11 10 ? MacBook Air Develop a full pro forma statement to arrive at each answer. Include the full pro-forma statement as part of your work! 3. Guadalajara & Blings is a firm that makes Mexican food and princess tiaras. It is a competitor of the firm In the previous problem, so It will have the same cost of capital and the same long-term growth rate (in fact, your keen analysis should notice something fishy - Its balance sheet looks very similar to its competitor). For the sake of simplicity, we will also assume that it has the same cost of equity (although In reality, this will not be the case if It has a different debt ratio). This firm has 500,000 shares of stock outstanding. The accounting statement is in thousands of dollars on the following pages. Assuming that the projections are correct and that there are no asset sales other than those lit book value, compute the stock price per share using: a) the WACC/FCF method b) the Flow-to-Equity method You are already given a pro-forma statement for this problem, but you still need to show how you arrived at your pro-forma cash flows. 2 3 WN 1 2 3. 4. S. 6. 7. & Sales Cost of Goods Sold Other Costs EBITDA (1-2-3) Depreciation and Amortization EBIT (pretax profit) (4-5) Tax at 35% Profit after Tax (6-7) -1 0 1 39,357.0 40,123.0 36,3510 18,564.0 22,879.0 21,678.0 7,645.0 8,025.0 6,797.0 13,148.0 9,219.0 7,876.0 5,745.0 5,678.0 5,890.0 7,403.0 3,5410 1.986.0 2,591.1 1,239.4 695.1 4,811.0 2,301.7 1,290.9 30,155.0 17,560.0 5,078.0 7,517.0 5,670.0 1,847.0 646.5 1,200.6 28,345.0 16,459.0 4,678.0 7,208.0 5,908.0 1,300.0 455.0 845.0 5 29,982.0 30,450.0 15,631.0 14.987.0 4,987.0 5,134.0 9,364.0 10,329.0 6,107.0 5,908.0 3,257.0 4,4210 1,140.0 1,5474 2,117.1 2,873.7 566.0 784.0 -54.0 -342.0 -245.0 127.0 235.0 9. Change in Working Capital 10. Investment (change in gross PP&E) 6,467,0 6,547.0 7,345.0 5,398.0 5,470.0 6,420.0 6,598.0 End of Year 0 1,350 940 L 2.360 4,650 9,850 14.500 Balance Sheet Assets Current assets: Cash and cash equivalents Accounts receivable Inventory Total current assets Net Fixed Assets Total assets Uabilities and stockholders' equity Current liabilities: Accounts payable Short/Current Long Term Debt Total current liabilities Long Term Debt Capital Leases Deferred Taxes Total abilities Stockholders' equity Common stock & Pald-in Capital Retained Earnings Total stockholders' equity Total liabilities and equity ge 2 of 3 974 words English (United States) stv A 1,920 1,500 3.420 2,800 700 1.500 8,420 3,500 2,580 6,080 14.500 Focus 11 10 ? MacBook Air