FM12 Ch 15 Tool Kit -...

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1b7eae1d3b3785ea333fc191502c1b480470cbb0.xls Corporate Valuation Michael C. Ehrhardt Page 1 06/15/2011 12/22/2006 THE CORPORATE VALUATION MODEL (Section 15.2) INPUT DATA SECTION: Current and Projected Data Used in the Analysis MagnaVision, Inc.: Income Statements for Years Ending December 31 (in millions of dollars) Actual Projected 2007 2008 2009 2010 2011 Net Sales $700.0 $850.0 $1,000.0 $1,100.0 $1,155.0 Costs (except depreciation) $599.0 $734.0 $911.0 $935.0 $982.0 Depreciation 28.0 31.0 34.0 36.0 38.0 Total operating costs $627.0 $765.0 $945.0 $971.0 $1,020.0 $73.0 $85.0 $55.0 $129.0 $135.0 Less: Net interest 13.0 15.0 16.0 17.0 19.0 Earning before taxes $60.0 $70.0 $39.0 $112.0 $116.0 Taxes (40%) 24.0 28.0 15.6 44.8 46.4 Net income before pref. div. $36.0 $42.0 $23.4 $67.2 $69.6 Preferred div. 6.0 7.0 7.4 8.0 8.3 Net income avail. for com. div. $30.0 $35.0 $16.0 $59.2 $61.3 Common dividends $0.0 $0.0 $0.0 $44.2 $45.3 Addition to retained earnings $30.0 $35.0 $16.0 $15.0 $16.0 Number of shares 100 100 100 100 100 Dividends per share $0.000 $0.000 $0.000 $0.442 $0.453 MagnaVision Inc.: December 31 Balance Sheets (in millions of dollars) Actual Projected 2007 2008 2009 2010 2011 Cash $17.0 $20.0 $22.0 $23.0 $24.0 Marketable Securities 63.0 70.0 80.0 84.0 88.0 Accounts receivable 85.0 100.0 110.0 116.0 121.0 Inventories 170.0 200.0 220.0 231.0 243.0 Total current assets $335.0 $390.0 $432.0 $454.0 $476.0 Net plant and equipment 279.0 310.0 341.0 358.0 376.0 Total Assets $614.0 $700.0 $773.0 $812.0 $852.0 Liabilities and Equity Accounts Payable $16.0 $20.0 $22.0 $23.0 $24.0 Notes payable 123.0 140.0 160.0 168.0 176.0 Accruals 44.0 50.0 55.0 58.0 61.0 Total current liabilities $183.0 $210.0 $237.0 $249.0 $261.0 Long-term bonds 124.0 140.0 160.0 168.0 176.0 Preferred stock 62.0 70.0 80.0 84.0 88.0 Common Stock (par plus paid in capital) $200.0 $200.0 $200.0 $200.0 $200.0 Retained earnings 45.0 80.0 96.0 111.0 127.0 Common equity $245.0 $280.0 $296.0 $311.0 $327.0 Total liabilities and equity $614.0 $700.0 $773.0 $812.0 $852.0 Chapter 15. Tool Kit for Corporate Valuation, Value-Based Management, and Corporate Governance This spreadsheet has two major components, one for Corporate Valuation and one for Value Based Management. Click on the tabs in the lower left of the screen to switch between sections. The value of a company is the sum of: (1) the value of its assets-in-place, including their associated growth opportunities, which is called the value of operations and (2) the value of its nonoperating assets, such as marketable securities and investments in non-controlled affiliates. The value of operations is the present value of the free cash flows produced by the assets-in-place and their associated growth opportunities. You are given the current and projected financial statements of MagnaVision.
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This note was uploaded on 06/15/2011 for the course FI515 FI515 taught by Professor Fi515 during the Spring '10 term at Keller Graduate School of Management.

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FM12 Ch 15 Tool Kit -...

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