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ACME Valuation The current (2003) and projected f...

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Question

ACME Valuation The current (2003) and projected financial statements for ACME General Corporation are shown in the worksheet in the file Prob 04-01.xls. Fill in the yellow cells with formulas. a. Start with the FCF calculation. Use the entries in the balance sheets and income statements to calculate the elements for the FCF, and the resulting FCF for each year through the forecast period. b. Use the information given in the WACC section to estimate ACME?s costs of debt and equity financing. Using your calculated costs of debt and equity and the target proportions of debt and equity, calculate ACME?s WACC. c. Finally, estimate per share value of ACME?s stock. This will require calculating the horizon value, then summing the present values of the horizon value and the FCF?s during the forecast period. Then the value of non-equity claims must be subtracted, and the residual equity value divided by the number of outstanding shares.

 

Paper#10078 | Written in 18-Jul-2015

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