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Compute the price per share for the ordinary share

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Reference no: EM132949933

You were assigned the team leader for the valuation of The Little Pic Co Ltd, a subsidiary for the Big Pic Ltd. The following data was available as at December 31, 2021.

Number of Shares Issued and Outstanding: 300,000,000
Current Market Value of Equity: $2,600,000,000
Debt $1,800,000,000 6%
Preference Shares $1,000,000,000
Cash at Bank $500,000,000
Beta 1.40 Tax Rate 25%
Current and Projected T-Bill Rate 2%
Market Risk Premium (MRP) 12%
YTM on Debt 5%
Current and Project Economy GDP 1.70%
Depreciation (annually) $35,000,000
Estimated EBIT for 2022 $900,000,000
FCF Growth Rate (2023 & 2024 YOY) 8%

Required:

Question 1: Compute the WACC

Question 2: Compute the value of the firm (be sure to show computation of FCF for 2022)

Question 3: Compute the price per share for the ordinary share

Reference no: EM132949933

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