Shady Sunglasses operates retail sunglass kiosks in shopping malls. Below is information related to the company:
(dollar amounts in thousands) 2014 2015 2016 2017 2018 2019
Net Cash Flow from Operations 564 628 854 1059 1345 1655
Interest Expense after tax 122 134 148 145 155 148
Decrease (Increase) in Cash
Required for Operations
-75 -54 -48 -32 -61 -48
Net Cash Flow from Investing -287 -300 -310 -285 -294 -277
Net Cash from Debt Financing 210 204 140 85 -40 -46
Present Value Factors (Re =
8.5%)
0.922 0.849 0.783 0.722 0.665
Common Shares Outstanding
in thousands
1,512
Required:
Using the above information and assuming that steady-state growth of FCFF in year 2019 and beyond will be 4%, and WACC = 8.5%, compute Shady Sunglasses' current firm value per share using FCFF valuation model. Remember to adjust the present value for midyear
discounting.