Fley Airline Supply is trading at $15/share but you think that price may not be right.
You have the following data and you want to use it to calculate its share price:
Gross Sales
$124M
COGS
54% of sales
General & Admin
$3.5M
Annual Sales Growth Rate
3.0%
Advertising, Promotion & Selling
$5M
Yearly Inflation for non-COGS expenses
3.3%
Tax Rate
21%
Discount Rate
8%
Cash Balance
$3M
Debt
$5M
Share o/s
$44M
Cash Flow Adjustment
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Working Capital
2.0
(2.0)
(1.2)
(0.3)
(1.0)
(2.0)
Capital Expenditures
(2.0)
(2.0)
(3.0)
(4.0)
(4.0)
(4.0)
Calculate the per share price and run sensitivities for growth rates of 3.0%, 3.5%, and 4% as well as discount rates of 8%, 9%, and 10%. Put these in a matrix.
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