Valuation of DEF Corp Here is some data about DEF Corp (in 000s): Sales for last...

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

Solutions

Expert Solution

Answer:

Value per share = $74.14

Above excel with 'show formula' is as follows:

jeff jeffy answered 1 year ago

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