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Calculate the free cash flows for the next year

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Reference no: EM132759900

Question - The following below are information of Angel Company's next year cash flows:

Net operating profit (EBIT) P234,000

Interest expense P20,000

Income tax rate 30%

Increase in working capital P14,000

Increase in net fixed assets P10,000

Angel Company's WACC is 12% and currently had P827,500 long-term debt. Assume that Angel Company has a constant growth rate of 4% and has currently common stock outstanding of 150,000 shares, determine the following:

Required -

a. Calculate the free cash flows for the next year.

b. Calculate the value of the company using corporate valuation approach.

c. Determine the stock price today.

Reference no: EM132759900

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