Reference no: EM133505938
Question 1.
You have been provided the following information for ExE plc for the year ended 31st December, 2022. It had net operating assets of £150m, debt of £67.5m (on which it pays before tax interest at 5.5%) and no financial assets. Assume the book value of debt equals the market value of debt. Its sales were £200m. The following forecasts of value drivers are also available to you for the next 3 years:
You estimate the after-tax weighted average cost of capital at 8.5%, and you believe it is robust to any changes in leverage. You understand that the firm's management team intends to keep future debt fixed at 45% of operating assets and the firm is prepared to raise new equity in order to achieve this if necessary.Finally, you believe that the year 2025 figures are representative of the company's long-run situation.
REQUIRED
(a) Estimate the net operating profits after tax (NOPAT), the free cash flows of the firm (FCFF), the residual income at firm level (RIF), and the dividends to shareholders for the next three years, assuming all free cash flow to equity holders is paid as dividends.
(b) Estimate the current value of equity using the indirect approach from both firm level residual income (RIF) and firm level free cash flow (FCFF) models.
(c) Estimate the implied cost of equity capital from the WACC for years 2023-2025 and explain why the cost of equity is not constant.
(d) Explain the concept of value drivers and describe value drivers in this question.
Write a description of case child and modified lesson plan
: Group 3 will be posting their videos or links to their videos along with a description of their case study child and a modified lesson plan.
|
Identify risk factors in different age groups for suicide
: Identify risk factors in different age groups for suicide. Be sure to consider socioeconomic status, psychosocial, developmental stage, and any other factors.
|
How treasury islands and secrecy jurisdictions harm poor
: How Treasury Islands and Secrecy Jurisdictions Harm Poor Nations (July 13, 2023). North East Journal of Legal Studies, Vol. 43, Article 5, Available at SSRN
|
Describe this person story, business, and factors
: Describe this person's story, business, and factors that contributed to their success. Was this person a good manager? Why or why not?
|
Estimate the net operating profits after tax
: Estimate the net operating profits after tax (NOPAT), the free cash flows of the firm (FCFF), the residual income at firm level (RIF), and the dividends
|
Discuss impression of meeting as it relates to collaboration
: Discuss your impression of the meeting as it relates to the collaboration between members of the IEP team, compliance with IDEA, and whether ethical principles.
|
Established a good level of education and skills
: Machine learning-generated algorithm from the trained data in these section fields - she had established a good level of education and skills
|
How will you store and organize the digital resources
: Where can teachers locate materials and resources that assist ELLs in content areas? How will you store and organize the digital resources?
|
Does this digital media posting support clinical quality
: Does this digital media posting support clinical quality? Is this digital health posting unbiased, objective and impartial-does it contain credible resources?
|