Construct the income statement

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Reference no: EM132040195

Use the following information to answer question

Consider the following abbreviated financial statements for Boathead Enterprises:

BOATHEAD ENTERPRISES 2014 and 2015 Partial Balance Sheets
Assets					Liabilities and Owners' Equity
		2014		2015			2014		2015
Current assets	$	946	$	1,008	Current liabilities	$	385	$	404
Net fixed assets		3,907		4,600	Long-term debt		2,029		2,197
					Equity		2,439		3,007

BOATHEAD ENTERPRISES 2015 Select IncomeStatement Info
Sales	$	12,340
Costs		5,920
Depreciation		1,050
Interest paid		190

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.

What is the stock price per share using the discounted FCFF valuation?

Reference no: EM132040195

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