In: Finance
Valuation of DEF Corp
Here is some data about DEF Corp (in 000s):
Sales for last year $560,000. Sales are predicted to grow at 8% for years 1-5 and 3% after that.
The following are expressed as a % of sales:
COGS % of Sales |
42% |
Gr Assets % of Sales |
26% |
Inv. % of Sales |
16% |
Assume Inventory is the only working capital account
Depreciation is 12% of Gross Fixed Assets
The company’s tax rate is 22%
DEF Corp. has a WACC of 11%
The market value of bonds is $950,000.
They have 40,000 shares of common stock outstanding.
Compute the value per share of DEF Corp.
Check figures: FCF Year 1 = $258,947
Terminal value (in Year 5$) = $4,735,782