A Credit Suisse First Boston financial analyst is evaluating Relant home furnishings by using FCF valuation with EBIT. He has accumulated the following information as of 2016: . Current Sales is $5,000 million, COGS is 50% of Sales .Net non-cash charge is fixed at 10% of Sales . Corporate tax rate is 21% . Investment in Fixed Capital (FC)= 30% of Increase in Sales • Investment in Working Capital (WC)=10% of Increase in Sales . Sales growth rate forecasts=25% for five years . FCF grows by 5% annual after five years . WACC=10% Please estimate Terminal value of FCF (in $millions) in the year 2021 using FCF/EBIT valuation model. O $73,537.34 O $82,882.52 O $101,324.34 O $107,666.02 $108.982.34 None of the above:

A Credit Suisse First Boston financial analyst is evaluating Relant home furnishings by using FCF valuation with EBIT. He has accumulated the following information as of 2016: . Current Sales is $5,000 million, COGS is 50% of Sales .Net non-cash charge is fixed at 10% of Sales . Corporate tax rate is 21% . Investment in Fixed Capital (FC)= 30% of Increase in Sales • Investment in Working Capital (WC)=10% of Increase in Sales . Sales growth rate forecasts=25% for five years . FCF grows by 5% annual after five years . WACC=10% Please estimate Terminal value of FCF (in $millions) in the year 2021 using FCF/EBIT valuation model. O $73,537.34 O $82,882.52 O $101,324.34 O $107,666.02 $108.982.34 None of the above:

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter8: Basic Stock Valuation

Section: Chapter Questions

Problem 9MC

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