Balance sheet, income statement, constant-growth perpetuity, and estimate its present value (
Assume that a public corporation has 2,500,000 shares outstanding and faces a marginal tax rate of 27.5%. Also, assume this corporation: (a) plows-back 40% of its net income into the firm for reinvestment and (b) has Gross Income of between $60,000,000 and $70,000,000 million for the last reporting period. First, you are to create the necessary Balance Sheets and Income Statement and then calculate the annual Cash Flow from Assets (aka: CFFA or Free Cash Flows (FCF)). A constraint here, however, is that your CFFA0 must range between $6,000,000 and $8,000,000 annually. Second, after calculating CFFA0, you are to assume that this corporation is a constant-growth perpetuity and estimate its present value (aka: intrinsic value). Said another way, you are to replicate and explain the relevant parts of the textbook, notes, and lectures associated with this question