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Consider the following data. I/S 2015 2016 Sales (S) 1,200 1,320 (+10%) - Costs (C) (COGS...

  1. Consider the following data.

I/S

2015

2016

Sales (S)

1,200

1,320 (+10%)

- Costs (C) (COGS &  SG&A)

1,000

= EBITDA (=EBIT)

200

- Interest

20

=EBT

180

- Tax (T)

40

=      NI

140

  • Dividend

40

  • Plowback

100

B/S

Assets (A)

2,000

Debt (D)

800

Equity (E)

1,200

  • Common stock (CS)

           800

  • Retained earnings (RE)                

400(+100)

From these data, calculate the following ratios, showing all work:

Margin (Cost) =

Turnover (TO) =

Interest Rate =

Tax Rate =

Leverage =

Assume that depreciation is included in “Costs”. Using these ratios, calculate the I/S and B/S for 2016.

Assume that the leverage remains constant (at 0.40).

Assume the common stock remains constant (at 800), that is no new common stock is issued.

  1. Using these data, calculate the cash flow to be discounted (CF) for 2016.
  2. Assuming that this CF increases by 10% per year indefinitely, what is the value of the company? (Use a discount rate (r) of 15%)
  3. What is the dividend paid during 2016? What is the dividend yield? What is retained earnings (RE) at the end of 2016?

Solutions

Expert Solution

ekkarill92 answered 1 year ago
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