The following forecast has been developed for Bolvig Ltd. by Louis XVI Analytics, (Amounts are in...
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The following forecast has been developed for Bolvig Ltd. by Louis XVI Analytics, (Amounts are in millions of dollars): Year Net operating profit after tax Net financial expense after tax Net dividends Net operating assets Net financial obligations Actual 2019 1270.8 636 Forecast 2020 289.5 36 28.95 1410 688.8 2021 289.5 34.5 28.95 1596 721.2 I 2022 352.5 37.5 35.25 1722 744 2023 363 40.5 36.3 1785.6 756 2024 360 40.5 36 17964 750 The cost of capital for equity is 10%. The cost of capital for the firm is 9%. Number of shares outstanding is 2,000 million. Other comprehensive income items are forecast to be zero. Question: Estimate the share price using residual income valuation model. Assume the terminal growth rate in residual income to be 0% from year 2024 onwards. The following forecast has been developed for Bolvig Ltd. by Louis XVI Analytics, (Amounts are in millions of dollars): Year Net operating profit after tax Net financial expense after tax Net dividends Net operating assets Net financial obligations Actual 2019 1270.8 636 Forecast 2020 289.5 36 28.95 1410 688.8 2021 289.5 34.5 28.95 1596 721.2 I 2022 352.5 37.5 35.25 1722 744 2023 363 40.5 36.3 1785.6 756 2024 360 40.5 36 17964 750 The cost of capital for equity is 10%. The cost of capital for the firm is 9%. Number of shares outstanding is 2,000 million. Other comprehensive income items are forecast to be zero. Question: Estimate the share price using residual income valuation model. Assume the terminal growth rate in residual income to be 0% from year 2024 onwards.
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Related Book For
Principles of Taxation for Business and Investment Planning 2020
ISBN: 9781259969546
23rd edition
Authors: Sally Jones, Shelley Rhoades Catanach
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