Assignment

1. Calculate the Geometric average rate of growth in Revenue for company.

2. Create a series of common sized income statements for all prior years.

3. Develop pro forma income statements for the next 5 years using the Revenue data from exhibit 3 &4.

4. Estimate Free Cash Flow for the next 5 years assuming depreciation of 5% of sales and capital expenditures of 4% of Sales.

5. Construct a pie chart of the firm's capital structure (market values) and calculate the Weighted average cost of capital assuming the following data:

a. Market Value of Equity: 108 B

b. Beta: 1.2

c. Expected Return on the market: 9%

d. Risk Free rate: 1.8%

e. Assume a marginal tax rate of 33%

f. Use the data from exhibit 4 for the firm's debt

6. Calculate the value of the firm using the following assumptions:

a. Terminal growth rate: 3%

b. Terminal weighted average cost of capital: 11%

7. Construct Pro forma balance sheets and statements of cash flow for the next 5 years.

8. The firm is considering issuing a 10 year 3 Billion note denominated in Swiss Francs (CHF) in 2019. The exchange rate is $1 = 1CHF.

The proceeds will be used to build a factory in the U.S. The coupon rate is expected to be 1.5%.

The factory will produce a new product to be sold in the U.S. Product D is expected to add $1 billion in sales per year starting in 2020 with a 40% cost of goods sold.

Additionally, selling, general, and administrative costs are expected to increase by $90 million per year. Please illustrate the impact to firm's overall value as well as the change in the capital structure and cost of capital.

The company offers 3 products sold in three markets. Please use the data below to develop the sales forecast for the pro forma income ststatements.

Attachment:- Final Project.rar