Assignment: Common Stock Valuation
The "historicals" tab gives the recent performance and balance sheets for a long-forgotten company, Actual Conglomerate Inc, with the name and the dates changed. Also, I made some changes to the data, but the nature of the original company is still there. It is currently owned by a private investment group. They are considering whether to break into free-standing subsidiaries, each to have an IPO. Their first step is valuate it as a whole, in its current conglomerate form.
Your job is to valuate the company as a whole (Value), its equity value and a price per share, assuming it would be sold via 8 million shares.
Assumptions:
[0] enter your class number in cell F1 in "historicals"
[1] your growth rate, inflator and WACC are given in the "Valuation" tab.
[2] the "valuation" tab format goes for 10 years, but you should not use the columns beyond when the low and sustainable growth rate starts
[3] your constant growth rate is already in cell C35 in "Valuation." It applies until you reach the year of low and sustainable growth.
[4] the low and sustainable growth, gL, is in cell A39 of "valuation"
[5] selling and administrative expense is half variable, and the other half is a fixed cash operating cost
[6] state your other assumptions about which cash costs are variable and which are fixed
[7] assume that book value of debt is a good estimate of market value of debt
[8] AR, AP, inventory, accruals and ship building contracts are spontaneous working capital items
[9] CAPX[replacement] was $4 million in 2014. You would state it as 4,000 in the valuation significant digits format.
[10] all new capital expenditure is to be depreciated over a 7-year straight line average life
[11] be sure to put your value estimates into cells B30 thru B34 in "valuation"
[12] the Goodwill of $18.52 million in 2014 includes a patent that ACI will no longer use. They can sell the patent immediately for $11.0 million.
[13] Print "historicals" using "portrait" and "fit to one page." Print "Valuation," your work, using "landscape" and "fit to one "page."
Attachment:- Assignment.rar