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Instructions Find the shareholder value per...




Instructions Find the shareholder value per share using a discounted cash flow analysis. Calculate the stock's margin of safety. Be sure that the formulas behind all calculations are provided in your model. Note: Use the CAPM to find the cost of equity. Assumptions NOPAT in current year 0:1100 NOPAT growth 10% Capital use in current year 0: 100 Growth in capital use 10% Forecast period (in years)5 NOPAT growth in perpetuity 0% Risk-Free Rate 3.5% Beta 1.2 Expected return on the market8% Credit Spread 1% Market value of equity 15000 Market value of debt 2500 Marginal Tax Rate 30% Shares outstanding 1000


Paper#4116 | Written in 18-Jul-2015

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