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Calculate the company free cash flow

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Reference no: EM133207249

Below you will find the Stiller Corporation financials for the year 2018 and 2019 (Table 7).

Stiller Corporation Comparative Balance Sheet (2018-2019)   in USD

#

TEXT

2019

2018

1

Cash

$157,000

$78,000

2

Accounts Receivable

180,000

185,000

3

Investments

52,000

74,000

4

Equipment

298,000

240,000

5

Less accumulated depreciation

(106,000)

(89,000)

6

Current liabilities

134,000

151,000

7

Common stock

160,000

160,000

8

Retained earnings

287,000

177,000

Additional information:

Investments were sold at a loss (not extraordinary) of $7,000; no equipment was sold; cash dividends paid were $50,000, and net income was $160,000.

  1. Formulate a statement of cash flows for 2019 for Stiller Corporation.
  2. Calculate the company's free cash flow.
  3. Assuming the 2019 cash flows grow at the rates of 20%, 18%, 15% in 2020, 2021, and 2022 respectively, and then stabilize at 10%, calculate the current value of Stiller Corporation. Assume the company's weighted average cost of capital is 12%.

Please show the work done in excel for me to understand

Reference no: EM133207249

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