In the most recent year (2017), ZSeparator had an EBIT of $340 million. Depreciation was $68 million, interest expenses were $13 million, increase in net working capital was $34 million and capital expenditure was $85 million.
Over the next 4 years, EBIT is expected to grow by 20% per year, depreciation by 15% per year, capital expenditure by 25% per year and change in net working capital by 15% per year. Debt and interest expenses are expected to stay constant. The annual free cash flow to equity is expected to grow by 5% per year after 2021.
The cost of equity is 11% and the average tax rate is 34%. The firm has 10 million shares outstanding.
What was the free cash flow to equity in 2017 (in $ million)?
What is the expected free cash flow to equity in 2021 (in $ million)?
What is the horizon value (terminal value) in 2021 (in $ million)?
What is the market value of equity today (in $ million)?
What is the fair stock price today?