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Unformatted text preview: $ 675,000,000 $ 815,000,000 Current Liabilities (all non-interest bearing) $ 57,000,000 $ 141,000,000 Long Term Debt $ 0 $ 0 . Total Liabilities $ 57,000,000 $ 141,000,000 Shareholders equity $ 618,000,000 $ 674,000,000 Total liability & equity $ 675,000,000 $ 815,000,000 Capital Expenditures $ 34,000,000 $ 38,000,000 2-2 1-1 1 Selected Financial Information . Required rate of Return on equity 14% Growth Rate of Industry 13% Industry P/E 26 Use FCFE to value the stock of Medical Corporation. Medical Corporations FCFE will grow at 27% for two years and 13% thereafter forever. Capital expenditures, depreciation, and working capital are all expected to increase proportionately with FCFE. a. Compute the amount of FCFE per share for 2009 using the data above. b. Compute the current value of a share of Medical Corp. stock based on the two stage FCFE model....
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- Spring '10