Question: Please provide the formulas if you're using excel because I want to learn how to do it I don't just need answers 3. (60 points)

 Please provide the formulas if you're using excel because I want

Please provide the formulas if you're using excel because I want to learn how to do it I don't just need answers

to learn how to do it I don't just need answers 3.

3. (60 points) Free Cash Flow Valuation You have gathered XYZ Corporation's financial statements in the following tables. Assume there will be no sales of long-term assets in 2010. Calculate forecasted free cash flow to the firm (FCFF) and free cash flow to equity (FCFE) for 2010. Note that figures in brackets indicate a negative number. All numbers reported are in millions. Balance Sheet 2010 Forecast 2009 Actual Income Statement Cash 10 5 2010 Forecast 2009 Actual Accounts receivable 30 15 Sales 300 250 Inventory 40 30 Cost of goods sold 120 100 Current assets 80 50 Gross profit 180 150 Gross property, plant, and equipment 40 300 SG&A 35 30 Accumulated depreciation -190 140 Depreciation 50 40 Total assets 290 210 EBIT 95 80 Interest expense 15 10 Accounts payable 20 20 Pre-tax earnings 80 70 Short-term debt 20 10 Taxes (at 30%) 24 21 Current liabilities 40 30 Net income 56 49 Long-term debt 114 100 Common stock 50 50 Retained earnings 86 30 Total liabilities and owner's equity 290 210 A. (10 points) Calculate Investment in Fixed Capital (FCInv). B. (10 points) Calculate Investment in Working Capital (WCInv). C. (10 points) Calculate Free Cash Flow to Firm (FCFF). D. (10 points) Calculate Net Borrowing and Free Cash Flow to Equity (FCFE). E. (10 points) XYZ's beta is estimated to be 1.25. The current market risk premium is 5%. The risk-free rate of interest is 2%. What is the estimated required return of equity for XYZ? F. (10 points) XYZ's growth rate is estimated to be 5%. The firm has 6 million shares outstanding. What is the intrinsic value for XYZ's share price? (5 points) If the market price for the firm is currently 50 dollars per share, what is your investment decision? (5 points)

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