Intrinsic Value per Share Assignment | Homework For You
June 8th, 2020
Value the shares of Pulitzer Co. The modeling assumptions are:
• Current sales are $60 million. They will grow at 30% annually for the first four years, and then grow at 6% annually thereafter.
• Net income will be 10% of sales.
• The net investment in fixed capital will be 50% of the sales increase each year
• The investment in working capital will be 10% of the sales increase.
• Debt financing will be 40% of the net investments in fixed capital and working capital each year
• The required rate of return for equity is 11%.
• There are 2 million outstanding shares.
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