Final Fall 2010 TakeHome

Final Fall 2010 TakeHome - Eric Schneck Brigham Young...

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Eric Schneck Section 2 Brigham Young University Department of Finance ManEc 453 Money, Banking and Financial Markets Final - Take Home Part Due: December 15, 2010 1. Forecast sales for Rockwell by quarter for the years 2011 and 2012 Forecast profits annually for the years 2011 and 2012 Sales Forecast ( in '000 ) Q I Q II Q III Q VI Total Pre-Tax Profit 2011 394 745 702 469 2,310 212 2012 652 1,233 1,163 776 3,824 351 2. Estimate the fair market value for Rockwell on 12/31/2011 and 12/31/2012 (Assume that the profit margin in 2011 and 2012 is the same as 2010) 2011 2012 Sales Multiple 1.2 2,772 4588.8 PE Multiple 10 2120 3510 Average 2,446,000 4,049,400 These were estimated using a sales growth of 19.98% which was the average sales growth from 2007-2010, They were then adjusted for the amount of housing starts that are projected for 2011 and 2012. I assumed that because Rockwell had losses for the previous years that he will be able to carryforward his tax benefit from previous years so the Pre-Tax Profit amount
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This note was uploaded on 03/17/2011 for the course MANEC 453 taught by Professor Jerrynelson during the Fall '10 term at BYU.

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Final Fall 2010 TakeHome - Eric Schneck Brigham Young...

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