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You are valuing Soda City Inc. It has $104 million of debt, $89 million of cash,...

You are valuing Soda City Inc. It has $104 million of debt, $89 million of cash, and 154 million shares outstanding. You estimate its cost of capital is 12.6%. You forecast that it will generate revenues of $703 million and $797 million over the next two years, after which it will grow at a stable rate in perpetuity. Projected operating profit margin is 21%, tax rate is 29%, reinvestment rate is 23%, and terminal EV/FCFF exit multiple at the end of year 2 is 15. What is your estimate of its share price? Round to one decimal place.

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Expert Solution

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -

jeff jeffy answered 2 years ago
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