PQ2_A - FINA537 Equity Valuation Solutions to Practice 2...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
FINA537 Equity Valuation Solutions to Practice 2 Questions Question 1 Year 2001 2002 2003 2004 2005 (1) After-tax operation income 1501 2006 2422 2632 2849 (2) Depreciation 530 555 580 605 630 (3) Net Working Capital 598 756 889 961 1,044 (4) Capital Expenditure 242 263 280 295 300 (5) Free Cash Flow 1,891 2,140 2,589 2,870 3,096 (6) PV of FCF = 7,938 (7) 10739 $ ) 1 ( ) 1 ( 5 2005 = + + × r g r g FCF (8) Value of Jackson Container = 7938+10739=18677 Question 2 AG Scenario 1. Sales, assume growth rate of 40% 2004 2005 2006 2007 1029 1440.6 2016.84 2823.576 2. Operating Expense, assuming operating expense/sale is 74%, 73% and 73% 2004 2005 2006 2007 765 1066.044 1472.293 2061.21 3. SG&A, assuming SG&A/Sales is 16% 2004 2005 2006 2007 191.00 230.50 322.69 451.77
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
4. Depreciation, according to common size statement, we know the past depreciation/sales varies from 2.53%~3.18%. We assume the future depreciation/sales is 2.5% 2004 2005 2006 2007 26.0 36.0 50.4 70.6 5. EBIT=Sales-Operating expense –General expense-Depreciation
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 3

PQ2_A - FINA537 Equity Valuation Solutions to Practice 2...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online