Question

In: Finance

Following are the income statement and balance sheet for Texas Roadhouse for the year ended December...

Following are the income statement and balance sheet for Texas Roadhouse for the year ended December 29, 2015.

a. Assume the following forecasts for TXRH’s sales, NOPAT, and NOA for 2016 through 2019. Forecast the terminal period values assuming a 1% terminal period growth rate for all three model inputs: Sales, NOPAT, and NOA.

Round your answers to the nearest dollar.

Reported Forecast Horizon Terminal
$ thousands 2015 2016 2017 2018 2019 Period
Sales $1,807,368 $2,078,473 $2,390,244 $2,581,464 $2,787,981 Answer
NOPAT 102,495 170,435 196,000 211,680 228,614 Answer
NOA 662,502 761,904 876,189 946,284 1,021,987 Answer

b. Estimate the value of a share of TXRH common stock using the discounted cash flow (DCF) model as of December 29, 2015; assume a discount rate (WACC) of 7%, common shares outstanding of 70,091 thousand, net nonoperating obligations (NNO) of $(14,680) thousand, and noncontrolling interest (NCI) from the balance sheet of $7,520 thousand. Note that NNO is negative because the company’s cash exceeds its nonoperating liabilities.

Rounding instructions:

  • Use rounded answers for subsequent computations.

  • Round answers to the nearest whole number unless otherwise noted.
  • Round discount factor to 5 decimal places and stock price per share to two decimal places.

Do not use negative signs with any of your answers below.

Question: What is the stock price per share?

Solutions

Expert Solution

2015 2016 2017 2018 2019 Terminal Period
Sales $    18,07,368 $   20,78,473 $   23,90,244 $   25,81,464 $   27,87,981 $       28,15,861
NOPAT $      1,02,495 $     1,70,435 $     1,96,000 $      2,11,680 $     2,28,614 $          2,30,900
NOA $      6,62,502 $     7,61,904 $     8,76,189 $      9,46,284 $   10,21,987 $       10,32,207
Increase in NOA $         99,402 $     1,14,285 $         70,095 $         75,703 $             10,220
FCFF = NOPAT-Increase in NOA = $         71,033 $         81,715 $      1,41,585 $     1,52,911 $          2,20,680
Discount factor [1/1.07^t] 0.93458 0.87344 0.81630 0.76290
PV of horizon FCFF $         66,386 $         71,373 $      1,15,576 $     1,16,655
Cumulative PV of FCFF $      3,69,990
Terminal FCFF = 220680/(0.07-0.01) = $   36,78,000
PV of terminal FCFF = 3678000*0.76290 = $    28,05,946
Total firm value $    31,75,936
Less: NNO $        -14,680
Less: NCI $            7,520
Firm's equity value $    31,83,096
Common shares outstanding 70091
Value of one share $            45.41

jeff jeffy answered 1 year ago
Next > < Previous

Related Solutions

Complete a Balance Sheet ABC Corporation Income Statement For the Year Ended December 31, 2014 Sales...
Complete a Balance Sheet ABC Corporation Income Statement For the Year Ended December 31, 2014 Sales Revenue    792,845 Less: Operating Expenses Wages Expense         80,350 Office Expense         21,700 Utilities Expense         31,000 Advertising Expense $       8,400 Insurance Expense         82,000 Employee Compensation Expense         10,000 Bad Debt Expense         25,000 Pension Expense         40,000 Depreciation Expense         33,759 Total Operating Expenses    332,209 Income from Operations    460,636 Other Revenue/Expenses Rent Revenue         12,000 Interest Income         19,561...
Complete a Balance Sheet ABC Corporation Income Statement For the Year Ended December 31, 2014 Sales...
Complete a Balance Sheet ABC Corporation Income Statement For the Year Ended December 31, 2014 Sales Revenue    792,845 Less: Operating Expenses Wages Expense         80,350 Office Expense         21,700 Utilities Expense         31,000 Advertising Expense $       8,400 Insurance Expense         82,000 Employee Compensation Expense         10,000 Bad Debt Expense         25,000 Pension Expense         40,000 Depreciation Expense         33,759 Total Operating Expenses    332,209 Income from Operations    460,636 Other Revenue/Expenses Rent Revenue         12,000 Interest Income         19,561...
The income statement and selected balance sheet information for Direct Products Company for the year ended...
The income statement and selected balance sheet information for Direct Products Company for the year ended December 31 are presented below. Income Statement Sales Revenue $ 51,600 Expenses: Cost of Goods Sold 22,500 Depreciation Expense 2,300 Salaries and Wages Expense 9,300 Rent Expense 4,800 Insurance Expense 2,050 Interest Expense 1,950 Utilities Expense 1,550 Net Income $ 7,150 Selected Balance Sheet Accounts Ending Balances Beginning Balances Accounts Receivable $ 575 $ 610 Inventory 960 755 Accounts Payable 435 490 Prepaid Rent...
The following is the income statement for Nikov and Co. for the year ended 31 December...
The following is the income statement for Nikov and Co. for the year ended 31 December 2014, along with information relating to the preceding year. Income statement for the year ended 31 December 2014 £000 2013 £000 Sales revenue 420.2 382.5 Cost of sales (126.1) (114.8) Gross profit 294.1 267.7 Salaries and wages (92.6) (86.4) Selling and distribution costs (98.9) (75.4) Rent and rates (22.0) (22.0) Bad debts written off (19.7) (4.0) Telephone and postage (4.8) (4.4) Insurance (2.9) (2.8)...
Podracer Productions provides the following income statement for the year ended December 31, 2017. Income Statement...
Podracer Productions provides the following income statement for the year ended December 31, 2017. Income Statement Sales $1,530,600 Interest revenue 17,250 Cost of goods sold (895,400) General expenses (255,400) Depreciation expense (23,500) Salaries expense (114,300) Interest expense (12,500) Income tax expense (85,500) Loss on sale of equipment (9,500) Net income $   151,750 In addition, Podracer provides the following balance sheet information Dec 31, 2017 Dec. 31, 2016 Accounts Receivable $250,400 $225,400 Interest Receivable 2,100 2,250 Inventory 74,300 59,550 Prepaid General...
Given is the Income Statement for the year ended December 31, 20XX, Statement of Retained Earnings for the year ended December 31, 20XX
Given is the Income Statement for the year ended December 31, 20XX, Statement of Retained Earnings for the year ended December 31, 20XX and Comparative Balance Sheets for 20XW and 20XX of Maris Corporation: Maris CorporationIncome StatementYear Ended December 31, 20XX  Sales$3,800,000  Cost of goods sold2,250,000        Gross profits1,550,000  Selling and administrative expense540,000  Amortization expense200,000        Operating income810,000  Interest expense43,000        Earnings before taxes767,000  Taxes440,000        Earnings after taxes327,000    Preferred stock dividends30,000     Earnings available to common shareholders$297,000    Shares outstanding198,000  Earnings per share$1.50   Statement of...
question: Prepare Tracy’s income statement for the year ended December 31, 2017.    Trial balance for...
question: Prepare Tracy’s income statement for the year ended December 31, 2017.    Trial balance for Tracy Underhill as at 31 December 2017 Debit Credit      £                    _ . £ Sales revenue 695,000 Inventory (as at 1 January 2017) 105,800 Purchases 625,200 Non-current assets at cost: Equipment 100,000 Motor vehicle 80,000 Accumulated depreciation: Equipment 10,000 Motor vehicle 10,000 Insurance 14,700 Rent 30,000 Heating and lighting 10,000 Salaries and wages 40,000 Motor expenses 15,300 Miscellaneous expenses 28,500 Receivables 110,000 Allowance...
Hyrkas Corporation's most recent balance sheet and income statement appear below: Balance Sheet December 31, Year...
Hyrkas Corporation's most recent balance sheet and income statement appear below: Balance Sheet December 31, Year 2 and Year 1 (in thousands of dollars) Year 2 Year 1 Assets Current assets: Cash $ 220 $ 330 Accounts receivable, net 360 380 Inventory 330 300 Prepaid expenses 20 20 Total current assets 930 1,030 Plant and equipment, net 1,180 1,300 Total assets $ 2,110 $ 2,330 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 300 $ 330 Accrued liabilities 50...
Hyrkas Corporation's most recent balance sheet and income statement appear below: Balance Sheet December 31, Year...
Hyrkas Corporation's most recent balance sheet and income statement appear below: Balance Sheet December 31, Year 2 and Year 1 (in thousands of dollars) Year 2 Year 1 Assets Current assets: Cash $ 170 $ 230 Accounts receivable, net 260 280 Inventory 230 200 Prepaid expenses 20 20 Total current assets 680 730 Plant and equipment, net 880 900 Total assets $ 1,560 $ 1,630 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 200 $ 230 Accrued liabilities 50...
Hyrkas Corporation's most recent balance sheet and income statement appear below: Balance Sheet December 31, Year...
Hyrkas Corporation's most recent balance sheet and income statement appear below: Balance Sheet December 31, Year 2 and Year 1 (in thousands of dollars) Year 2 Year 1 Assets Current assets: Cash $ 190 $ 270 Accounts receivable, net 300 320 Inventory 270 240 Prepaid expenses 20 20 Total current assets 780 850 Plant and equipment, net 1,000 1,060 Total assets $ 1,780 $ 1,910 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 240 $ 270 Accrued liabilities 50...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT