Problem: Quanta, Inc. reported an after-tax profit margin of 3.50%, an asset turnover of 4.00 on net operating assets of $20.0 billion, and net financial obligations of $7.0 billion on January 31, 2000. Analysts expect that the sales of Quanta, Inc. will grow 8% on average in the future. Analysts also expect
1. If the profit margins and turnovers of Quanta, Inc. continue at their 2000 level and its cost of capital is 10%, what is the value of equity?
2. The shares of Quanta, Inc. were traded at a total market capitalization of $145 billion on January 31, 2000. If profit margins and turnovers were to continue at their 2000 level, what sales is the market forecasting for Quanta, Inc. in 2004?