The analyst is analyzing the financial statements of another Yettobe corporation (the state- ments are in...

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The analyst is analyzing the financial statements of another Yettobe corporation (the state- ments are in million dollars). Its stock is currently traded at $50 and it has 20 million shares outstanding. The firm's market value of debt is 120 millions. The shareholders require a return of 15% and before-tax cost of debt is 10%. Assume that the expected long-term growth rates in FCFF, FCFE, dividends, and residual income are 4%. Using the constant growth model to compute the following: Balance sheet Current assets Cash 2021 2022 Income statement 2022 Revenue 2,500 17 18 (-) Cost of goods sold 2,000 Accounts receivable 23 20 Gross profit 500 Inventory 4 3 (-) SG&A 250 Total current assets 44 41 (-) Depreciation 50 Fixed assets EBIT 200 Gross property, plant, and equipment Accumulated depreciation 920 1,000 (-) Interest expense 20 (50) (100) EBT 180 Total fixed assets 870 900 (-) Taxes (at 20%) 36 Total assets 914 941 Net Income 144 Current liabilities Accounts payable 14 12 Short-term debt 50 60 Total current liabilities 64 72 Long-term debt 222 227 Total liabilities 286 299 Shareholders' equity Commonstock 548 548 Retained earnings 80 94 Total equity 628 642 Total liabilities and owner's equity 914 941 a. [6pts] What is firm's intrinsic value? b. [2pts] What is the intrinsic equity value per share using FCFF? c. [5pts] What is the intrinsic equity value per share using FCFE? d. [3pts] What is the intrinsic equity value per share using DDM? e. [3pts] What is the intrinsic equity value per share using residual income model? f. [1pt] Based on our valuations, should the analyst give a buy/hold/sell recommendation for Yettobe stock? The analyst is analyzing the financial statements of another Yettobe corporation (the state- ments are in million dollars). Its stock is currently traded at $50 and it has 20 million shares outstanding. The firm's market value of debt is 120 millions. The shareholders require a return of 15% and before-tax cost of debt is 10%. Assume that the expected long-term growth rates in FCFF, FCFE, dividends, and residual income are 4%. Using the constant growth model to compute the following: Balance sheet Current assets Cash 2021 2022 Income statement 2022 Revenue 2,500 17 18 (-) Cost of goods sold 2,000 Accounts receivable 23 20 Gross profit 500 Inventory 4 3 (-) SG&A 250 Total current assets 44 41 (-) Depreciation 50 Fixed assets EBIT 200 Gross property, plant, and equipment Accumulated depreciation 920 1,000 (-) Interest expense 20 (50) (100) EBT 180 Total fixed assets 870 900 (-) Taxes (at 20%) 36 Total assets 914 941 Net Income 144 Current liabilities Accounts payable 14 12 Short-term debt 50 60 Total current liabilities 64 72 Long-term debt 222 227 Total liabilities 286 299 Shareholders' equity Commonstock 548 548 Retained earnings 80 94 Total equity 628 642 Total liabilities and owner's equity 914 941 a. [6pts] What is firm's intrinsic value? b. [2pts] What is the intrinsic equity value per share using FCFF? c. [5pts] What is the intrinsic equity value per share using FCFE? d. [3pts] What is the intrinsic equity value per share using DDM? e. [3pts] What is the intrinsic equity value per share using residual income model? f. [1pt] Based on our valuations, should the analyst give a buy/hold/sell recommendation for Yettobe stock?