Estimate a reasonable intrinsic stock price per share as of 01/01/2023 for private Manufacturing Company A given the information in the table below. Also assume that the company has a 10.50% weighted average cost of capital, $5,542 million excess cash holdings, $25,000 million market value of debt, 1,000 million shares outstanding, and 2.0% FCF terminal growth rate starting at the end of 2027. Assume that the cash flows depicted in the table below occur at the end of each year (i.e., -600 is FCF1 and 16,500 is FCF5).

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Estimate a reasonable intrinsic stock price per share as of 01/01/2023 for private Manufacturing Company A given the information in the table below. Also assume that the company has a 10.50% weighted average cost of capital, $5,542 million excess cash holdings, $25,000 million market value of debt, 1,000 million shares outstanding, and 2.0% FCF terminal growth rate starting at the end of 2027. Assume that the cash flows depicted in the table below occur at the end of each year (i.e., -600 is FCF1 and 16,500 is FCF5).

Intrinsic Valuation at 1/01/2023
(5m)
Sales
EBIT
Net Income
FCF
2023P
11,996
1,346
491
-600
2024P
16,282
7,348
5,320
4,100
2025P
25,554
15,822
12,096
10,000
2026P
30,270
19,709
15,246
13,400
2027P
36,015
24,729
19,289
16,500
Transcribed Image Text:Intrinsic Valuation at 1/01/2023 (5m) Sales EBIT Net Income FCF 2023P 11,996 1,346 491 -600 2024P 16,282 7,348 5,320 4,100 2025P 25,554 15,822 12,096 10,000 2026P 30,270 19,709 15,246 13,400 2027P 36,015 24,729 19,289 16,500
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