This question has multiple parts, and I will repeat the info…
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This questiоn hаs multiple pаrts, аnd I will repeat the infоrmatiоn for each part. Pls answer only the question asked in each part to facilitate grading. If you are doing this in excel, you can do it all as one spreadsheet, and you can highlight each specific answer/sub-part. In order to receive the points for the question, make sure you clearly indicate the answer to each sub-part to indicate which question you are answering. Bama Corp is considering acquiring Buckeye Inc and you are on the team that is valuing the potential target firm. Buckeye Inc’s revenue growth rate is 9.2%, its COGS is 45% of sales, SG&A is 28% of sales, and NWC is 20% of sales. The forecast period for the valuation is 5 years, after which your team will apply a steady state growth rate is 6.25%. You are using a WACC rate of 11.85% and a tax rate is 30%. Initial year zero revenue is $9,085 and the firm accrues working capital in year zero. Depreciation is $1350 for years 1-3, and $1500 for years 4-5, CAPEX is $1500 for years 1-3 and 1300 for years 4-5. 3. What is terminal value (steady state value)?
This questiоn hаs multiple pаrts, аnd I will repeat the infоrmatiоn for each part. Pls answer only the question asked in each part to facilitate grading. If you are doing this in excel, you can do it all as one spreadsheet, and you can highlight each specific answer/sub-part. In order to receive the points for the question, make sure you clearly indicate the answer to each sub-part to indicate which question you are answering. Bama Corp is considering acquiring Buckeye Inc and you are on the team that is valuing the potential target firm. Buckeye Inc’s revenue growth rate is 9.2%, its COGS is 45% of sales, SG&A is 28% of sales, and NWC is 20% of sales. The forecast period for the valuation is 5 years, after which your team will apply a steady state growth rate is 6.25%. You are using a WACC rate of 11.85% and a tax rate is 30%. Initial year zero revenue is $9,085 and the firm accrues working capital in year zero. Depreciation is $1350 for years 1-3, and $1500 for years 4-5, CAPEX is $1500 for years 1-3 and 1300 for years 4-5. 3. What is terminal value (steady state value)?