Question: Financial Management Answer the below question, provide calculation (100 marks) Primark Corporation (PC here after) operates in retailing industry, a summary of its financial information

Financial Management

Answer the below question, provide calculation (100 marks)

Primark Corporation (PC here after) operates in retailing industry, a summary of its financial information on 31st Dec 2020 is in the following: . Net cash flow from operating activities after tax is (3,340 million . Cash outflows for acquisition of a subsidiary is f. 2, 120 million . Cash inflows for disposal of a subsidiary is E880 . Purchase of plant, property and machinery is $1,000 . Investment into financial assets is $500 . ING Netherland Securities analysts predict that PC's free cash flows to equity will increase by 1.5% in 2021 and the growth rate after 2021 is 0.8%. Assuming that there is no other tax. . PC's beta is 1.12. The US Treasury bond rate was 2.25%, and the risk premium is 5%. The total number of shares outstanding is 1000 million. (a) Estimate the value per share on 315 Dec 2020, using the discount free cash flows to equity model. [20] (b) Discuss the concepts of permanent income and economic income. Critically assess their implications for forecasting and equity valuation. [30] Total marks: [50]

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