Project 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.
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.
Attachment:- EXHIBITS.rar