If the Ideal Corp. were to be expected to generate FCF of $50,000 in 2015, $175,000 in 2016, and $250,000 in 2017, and the FCF is expected to grow at a constant rate of 6% from that point forward, what would be the estimated intrinsic value per share for the company's stock at the end of 2014?
Ideal Corp. Balance Sheets
|
Assets
|
20136
|
|
20147
|
|
Cash
|
$ 9,000
|
|
$ 7,282
|
|
Short-term investments.
|
48,600
|
|
20,000
|
|
Accounts receivable
|
351,200
|
|
632,160
|
|
Inventories
|
715,200
|
|
1,287,360
|
|
total current assets
|
$ 1,124,000
|
|
$ 1,946,802
|
|
Gross fixed assets
|
491,000
|
|
1,202,950
|
|
Less: accumulated depreciation
|
146,200
|
|
263,160
|
|
net fixed assets
|
$ 344,800
|
|
$ 939,790
|
|
Total assets
|
$ 1,468,800
|
|
$ 2,886,592
|
|
|
|
|
|
Liabilities and equity
|
20136
|
|
20147
|
|
Accounts payable
|
$ 145,600
|
|
$ 324,000
|
|
Notes payable
|
200,000
|
|
720,000
|
|
Accruals
|
136,000
|
|
284,960
|
|
total current liabilities
|
$ 481,600
|
|
$ 1,328,960
|
|
Long-term debt
|
323,432
|
|
1,000,000
|
|
Common stock (100,000 shares)
|
460,000
|
|
460,000
|
|
Retained earnings
|
203,768
|
|
97,632
|
|
total equity
|
$ 663,768
|
|
$ 557,632
|
|
Total liabilities and equity
|
$ 1,468,800
|
|
$ 2,886,592
|
Income Statements
|
20136
|
|
20147
|
|
Sales
|
$ 3,432,000
|
|
$ 5,834,400
|
|
Cost of goods sold
|
2,864,000
|
|
4,980,000
|
|
Other expenses
|
340,000
|
|
720,000
|
|
Depreciation
|
18,900
|
|
116,960
|
|
total operating costs
|
$ 3,222,900
|
|
$ 5,816,960
|
|
EBIT
|
$ 209,100
|
|
$ 17,440
|
|
Interest expense
|
62,500
|
|
176,000
|
|
EBT
|
$ 146,600
|
|
$ (158,560)
|
|
Taxes (40%)
|
58,640
|
|
(63,424)
|
|
Net income
|
$ 87,960
|
|
$ (95,136)
|
|
|
|
|
|
Other data
|
20136
|
|
20147
|
|
Stock price
|
$ 8.50
|
|
$ 6.00
|
|
Shares outstanding
|
100,000
|
|
100,000
|
|
EPS
|
$ 0.880
|
|
$ (0.951)
|
|
DPS
|
$ 0.220
|
|
$ 0.110
|