Orange Juice Technologies (OJ-Tech) earned $81.2 million in net income on $644 million in sales in the year that ended 12/31/2017. From the income statement you see that the operating profit in 2017 was $138.0 million. From the cash flow statement, capital expenditures were $62 million, depreciation expense was $74 million, and net working capital increased by $6 million in 2017.
OJ-Tech estimates their corporate WACC as 6.5%, and their average tax rate is 25%. Sales, income and free cash flow are expected to grow at a rate of 2% in 2018 and will continue to grow at that rate forever.
Book value of all debt is equal to $448 million, and the book value of equity is $927 million. There are currently 124.2 million common shares outstanding. The cash balance is $151 million.
a) Compute Free Cash Flow for 2017
b) Estimate the Enterprise Value of OJT as of 12/31/2017.
c) Compute the value of one share of common stock on 12/31/2017
d) Compute the price-to-book value ratio for OJT on 12/31/2017.