Please answer

DE Activity 1.2.1.pdf X + X O File | C:/Users/User/Downloads/Activity%201.2.1.pdf ACCT341, Chapter. Facebook Nativecamp.net M Why Good Account.. and CH_9_10_11_13_.. of 1 + | A) Read aloud | Draw V Highlight Erase Direction: Provide what is asked. (Please refer to exhibit 1 for the given) Exhibit 1: BrandCo: Income Statement and Reorganized Balance Sheet ($ million) Income statement Reorganized balance sheet Today Year 1 Year 1 Operating working capital * Today Revenues 800.0 840.0 70.1 73.6 Operating costs (640.0) (672.0) Property and equipment 438.4 160.3 Depreciation ( 40.0) ( 42.0) Invested capital 508.5 533.9 Operating profit 120.0 126.0 Debt 200.0 210.0 Interest expense ( 16.0) ( 16.0) Shareholders' equity 308.5 323.9 Earnings before taxes 104.0 110.0 Invested capital 508.5 533.9 Taxes 26.0) 27.5) Net income 78.0 32.5 accounts payable has been netted against inventory to determine operating working capital 1. Exhibit 1 presents the income statement and reorganized balance sheet for BrandCo, an $800 million consumer products company. Using the enterprise discounted cash flow model, determine NOPLAT and free cash flow for year 1. Assume an operating tax rate of 25%. 2. BrandCo currently has 50 million shares outstanding. If BrandCo's shares are trading at $19.16 per share, what is the company's market capitalization (value of equity)? Assuming the market value of debt equals today's book value of debt, what percentage of the company's enterprise value is attributable to debt, and what percentage is attributable to equity? Using these weights, compute the weighted average cost of capital. Assume the pretax cost of debt is 8 percent, the cost of equity is 12 percent, and the marginal tax rate is 25 percent. 3. Using free cash flow computed in Question 1 and the weighted average cost of capital computed in Question 2, estimate BrandCo's enterprise value using the growing-perpetuity formula. Assume free cash flow grows at 5 percent. 4. Assuming the market value of debt equals today's book value of debt, what is the intrinsic equity value for BrandCo? What is the intrinsic value per share? Does it differ from the share price used to determine the cost of capital weightings? 5. What are the three components required to calculate economic profit? Determine BrandCo's economic profit in year 1. 5. Using economic profit calculated in Question 5 and the weighted average cost of capital computed in Question 2, value BrandCo using the economic profit-based key value driver model. Does the calculation generate enterprise value or equity Type here to search P 3 A A GO ( ENG 10:08 PM 07/11/2020DE Activity 1.2.1.pdf X + X O File | C:/Users/User/Downloads/Activity%201.2.1.pdf ACCT341, Chapter. Facebook Nativecamp.net M Why Good Account.. But) CH_9_10_11_13_... of 1 + | A) Read aloud | Draw V Highlight Erase 1. Exhibit 1 presents the income statement and reorganized balance sheet for BrandCo, an $800 million consumer products company. Using the enterprise discounted cash flow model, determine NOPLAT and free cash flow for year 1. Assume an operating tax rate of 25%. 2. BrandCo currently has 50 million shares outstanding. If BrandCo's shares are trading at $19.16 per share, what is the company's market capitalization (value of equity)? Assuming the market value of debt equals today's book value of debt, what percentage of the company's enterprise value is attributable to debt, and what percentage is attributable to equity? Using these weights, compute the weighted average cost of capital. Assume the pretax cost of debt is 8 percent, the cost of equity is 12 percent, and the marginal tax rate is 25 percent. 3. Using free cash flow computed in Question 1 and the weighted average cost of capital computed in Question 2, estimate BrandCo's enterprise value using the growing-perpetuity formula. Assume free cash flow grows at 5 percent. 4. Assuming the market value of debt equals today's book value of debt, what is the intrinsic equity value for BrandCo? What is the intrinsic value per share? Does it differ from the share price used to determine the cost of capital weightings? 5. What are the three components required to calculate economic profit? Determine BrandCo's economic profit in year 1. 6. Using economic profit calculated in Question 5 and the weighted average cost of capital computed in Question 2, value BrandCo using the economic profit-based key value driver model. Does the calculation generate enterprise value or equity value? Should discounted economic profit be greater than, equal to, or less than discounted free cash flow? Hint: remember, prior year invested capital must be used to determine ROIC and capital charge Type here to search P3 9 xB WIAOm A GO () ENG 10:10 PM 07/11/2020