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Category > Business & Finance Posted 26 May 2017 My Price 12.00

The Miracle Clean Company has some ne

The Miracle Clean Company has some new products that it expects to lead to high growth in the near future. It has given analysts the following forecasts for the next three years.

  2012 2013 2014
Depreciation 15,000 21,000 27,000
EBIT 125,000 145,000 165,000
Investment in Operating Assets 35,000 25,000 10,000

The firmAc€?cs debt has a current market value of $250,000 and it has $64,000 in marketable securities. There are 100,000 common shares outstanding. The tax rate is 35% and WACC is estimated at 12%

1. Calculate the free cash flows for the first three years

2. After 2014 free cash flow growth is expected to slow to 8% per year permanently. What is the value of the stock today?

3. without the new products, free cash flow in 2012 would be $55,000 and it would grow at 8% per year forever. what is the value of the stock if the new products aren't introduce ?

 

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Status NEW Posted 26 May 2017 05:05 PM My Price 12.00

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