The company Bacall has forecasted Sales of 11 Million and an operating income of 1Million for the
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Question:
The company Bacall has forecasted Sales of 11 Million and an operating income of 1Million for the next year.
The Net working capital is a 22% of sales, their CAPEX is based on a 6% over Sales.
Their expected growth for the next 2 years is a 7% growth on sales and on Operating income.
The forecasted depreciation is 7% of Operating income.
They have not done a forecast for the year 4 and subsequent, but they expect a cash flow growth of 1.5% forever as from year 4 onwards.
The applicable tax rate is 15%.
The company has a WACC of 11%.
The company has 65.000 shares outstanding, and you are requested to estimate/calculate the PE ratio.
Related Book For
Corporate Finance
ISBN: 978-0077861759
10th edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
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