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Compute the price per share for the ordinary share

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Reference no: EM133022318

Question - 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 -

Compute the WACC.

Compute the value of the firm (be sure to show computation of FCF for 2022).

Compute the price per share for the ordinary share.

Reference no: EM133022318

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