Hastings AB is a software firm that has never paid a dividend before but its boards of directors are considering whether to initiate dividends and if so$,$ how much to pay. You have collected the following information on the firm:

$-$ The most recent years income statements is as follows:

Revenues SEK $532$ million

$-$ Cost of goods sold SEK $372\mathrm{.}4$ million $($includes depreciation of SEK $40$ million$)$

EBIT SEK $159\mathrm{.}6$ million

$-$ Interest expense SEK $10$ million

Taxable income SEK $149\mathrm{.}6$ million

$-$ Taxes SEK $41\mathrm{.}888$ million

Net Income SEK $107\mathrm{.}712$ million

$-$ The revenues, operating income and depreciation are expected to grow $10\%$ a year for the year, the tax rate for the company will be $28\%$ of taxable income for the year.

$-$ The non$-$cash working capital is currently $20\%$ of revenues and this ratio is expected to not change over the year.

$-$ The firm reported capital expenditures of SEK $50$ million last year, a level that will be maintained for the year.

$-$ The firm has an old bank loan of SEK $20$ million $($which is the firms only debt$)$ and it is expected to pay off the entire loan at the end of year.

$-$ The firm is planning one major acquisition next year and it expects the acquisition to cost SEK $50$ million.

$-$ The current cash balance of the firm is SEK $75$ million.

If no dividend is paid out. What is the Cash Balance at the end of year one?

Answer with two decimals.

Answer rating: 100% (QA)

If no dividend is paid out the cash balance at the end of year one is estimated to be SEK 4716 milli... View the full answer