Explain and define the Earnings Per Share, and using the following data, calculate the EPS for Rotor and Mora Valve Manufacturing Companies: Amounts in US$ 000s Rotor Mora Net Profit After Tax 50,000 40,000 If both companies share the same Shares Outstanding of 100,000 in the First Half of the year, then Rotor Reported 200,000 Shares at Year End, While Mora Reported 300,000 Shares at the Same Period.

Using Question 2 Answer (Weighted Average Shares), Rotor wishes to calculate the Fair Value for its Share, knowing that Rotors Expected Free Cash Flow Showed

Year 1 Year 2 Year 3 Year 4 Year 5 Net Free Cash Flow From Op. 20,000 25,000 32,000 35,000 41,000

Rotors Income Statement Depicted the Following Results

Year 1 Year 2 Year 3 Year 4 Year 5 Net Op. Profit After Tax. 15,000 18,000 22,000 25,000 30,000

Following Are the Macroeconomic Assumptions: Equity Capital $ : 20,000,000 Par Value $ : 100 Current Price $ : 100 Retained Earnings $ : 50,000 R.O.E. : 12% Beta : 1.5 Rm : 14

Rf : 11.3 Long-term Loans : 7,000 Interest Rate Applied % : 12 Short-term Loans : 4,000 Interest Rate Applied% : 9 Income Tax Rate % : 20 Calculate the WACC, and the Fair Price per Share