Dana Corporation does not pay a common dividend. Your job is to use the Cash Flow From Assets (CFFA) model to estimate the firm’s intrinsic stock price for December 31, 2023. You are given the following data for that purpose (note that all figures other than WACC are in Millions): What is the Value of Dana Corp.’s Operations, the expected growth rate in Free Cash Flows, and total value of the firm? Dana Corp. Financial Data ($Millions) Year 0 2020 2021 2022 2023 Free Cash Flow (FCF) $ 16.000 $ 16.800 $ 17.640 $ 18.522 Weighted-Average Cost of Capital (WACC) 8.25% Mktbl Securities (Non-Operating ST assets) $ 32.66 Non-Operating LT Assets $ 184.00 Short-term debt $ 52.00 Long-term debt $ 224.00 Preferred Equity $ 46.00 # Common Shares Outstanding (Millions
Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
Dana Corporation does not pay a common dividend. Your job is to use the Cash Flow From Assets (CFFA) model to estimate the firm’s intrinsic stock price for December 31, 2023. You are given the following data for that purpose (note that all figures other than WACC are in Millions):
What is the Value of Dana Corp.’s Operations, the expected growth rate in Free Cash Flows, and total value of the firm?
| Dana Corp. Financial Data ($Millions) | ||||
| Year 0 | ||||
| 2020 | 2021 | 2022 | 2023 | |
| $ 16.000 | $ 16.800 | $ 17.640 | $ 18.522 | |
| Weighted-Average Cost of Capital (WACC) | 8.25% | |||
| Mktbl Securities (Non-Operating ST assets) | $ 32.66 | |||
| Non-Operating LT Assets | $ 184.00 | |||
| Short-term debt | $ 52.00 | |||
| Long-term debt | $ 224.00 | |||
| Preferred Equity | $ 46.00 | |||
| # Common Shares Outstanding (Millions) | 15 |
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