Use the following information to answer questions 1-7
Consider the following abbreviated financial statements for Boathead Enterprises:
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BOATHEAD ENTERPRISES
2014 and 2015 Partial Balance Sheets
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Assets
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Liabilities and Owners' Equity
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2014
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2015
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2014
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2015
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Current assets
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$
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946
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$
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1,008
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Current liabilities
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$
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385
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$
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404
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Net fixed assets
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3,907
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4,600
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Long-term debt
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2,029
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2,197
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Equity
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2,439
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3,007
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BOATHEAD ENTERPRISES
2015 Select IncomeStatement Info
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Sales
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$
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12,340
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Costs
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5,920
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Depreciation
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1,050
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Interest paid
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190
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The tax rate is 35%. Long term debt trades at par. The firm has 1,000 shares outstanding. Free Cash Flow to the Firm will grow at 2% and the Free Cash Flow to Equity will grow at 7% forever. The weighted average cost of capital is 12%. The cost of equity is 20%. Construct the income statement. Then answer the following 4 questions.
1) What is the Free Cash Flow to the Firm for 2015?
2) What is the Value of the Firm (Assets)?
3) What is the stock price per share using the discounted FCFF valuation?
4) What is the Free Cash Flow to Equity for 2015?