Actual | Forecasts | |||
Year | 2019 | Year +1 | Year +2 | Year +3 |
Revenues | 37,137.0 | 40,426 | 44,006 | 47,904 |
<Cost of Goods Sold> | -14,762.0 | -18,931 | -20,607 | -22,432 |
<Selling, General and Administrative Expenses> | -11,711.0 | -13,169 | -14,336 | -15,605 |
<Interest Expense> | -239.0 | -200 | -245 | -10 |
Income before Tax | 10,425.0 | 8,126 | 8,818 | 9,856 |
<Income Tax> | -2,794.0 | -2,399 | -2,603 | -2,910 |
Net Income | 7,631.0 | 5,727 | 6,215 | 6,947 |
ASSETS: | ||||
Cash and Cash Equivalents | 1,651 | 1,804 | 1,964 | 2,138 |
Marketable Securities | 1,171 | 1,127 | 1,227 | 1,336 |
Accounts Receivable - Net | 3,725 | 5,295 | 4,524 | 6,165 |
Inventories | 1,926 | 1,793 | 2,255 | 2,152 |
Current Assets | 8,473 | 10,020 | 9,970 | 11,790 |
Property, Plant & Equipment - at cost | 19,058 | 21,151 | 23,744 | 26,837 |
<Accumulated Depreciation> | -9,871 | -11,479 | -13,088 | -14,696 |
Other Non-Current Assets (1) | 980 | 1,010 | 1,041 | 1,073 |
Total Assets | 18,640 | 20,701 | 21,668 | 25,004 |
LIABILITIES: | ||||
Accounts Payable - Trade | 2,000 | 3,243 | 2,634 | 3,594 |
Notes Payable and Short Term Debt | 274 | 316 | 331 | 382 |
Current Liabilities | 2,274 | 3,559 | 2,964 | 3,976 |
Long Term Debt | 2,550 | 4,004 | 4,117 | 4,751 |
Long Term Accrued Liabilities | 4,624 | 5,034 | 5,479 | 5,965 |
Total Liabilities | 9,448 | 12,597 | 12,561 | 14,691 |
Common Stock + Paid in Capital | 614 | 248.4 | 260 | 300 |
Retained Earnings | 16,336 | 17114 | 19605 | 22271 |
<Treasury Stock> | -7,758 | -9,258 | -10,758 | -12,258 |
Common Shareholders' Equity | 9,192 | 8,105 | 9,107 | 10,313 |
Total Liabilities and Equities | 18,640 | 20,701 | 21,668 | 25,004 |
Note: Common Dividends are 40% of NI
# of shares | 1581.0 |
Growth Rate | 3.05% |
Levered Market Beta | 0.76 |
Risk Free Rate | 4.07% |
Market Risk Premium | 6.11% |
A- what are the Dividends for Year +1
B- what are the Dividends for Year +2
C- what are the Dividends for Year +3
D- what is the Required Income for Year +1
E- what is the Required Income for Year +2
F- what is the Required Income for Year +3
G- what are the Dividends for Year t+1
H- what is the continuing DIV
I- What is the value of the stock according to the Financial Statement forecast
J- Currently, the D/E ratio is 0.5. What will be the new levered market beta of the firm if the D/E ratio changes to 1.2?
Sorry, but we are only required to answer first 4 parts of the question.
The rest of the question will be solved in same tone.
For the last part (j) you first have to deleverage the beta and then again releverage the beta to get the answer.
Hope it helps.
All the best?
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