1.

Consider following information of YY Café Ltd and find the intrinsic value of
the company.

Particulars Particulars
Sales 20000
COGS 60% of sales
Operating expenses 12% of Sales
Total Assets 12000Tk (Fixed asset is 35% of total Assets-Economic
life of Assets are 4 years & Salvage value is 200TK)
Depreciation Straight line method
Debt (at 12%) 6000
Debt to Equity Ratio 1
Cash 1200
Capital Expenditure 500
No of Share outstanding 500
Growth rate 10% for 4 years
Terminal growth rate 4% forever
Risk free rate 10-year T-Bond Rate is 7.5%
Market Return 12.5%
Beta 1.2
Retention Ratio 75%
Tax Rate 25%
***Amount in Million BDT
Requirements:
1. Calculate Weighted Average Cost of Capital
2. You are required to prepare Four-Year Pro Forma statement consider 2018 as base
year.
3. Calculate Intrinsic value under FCF & DDM Methods

Math 02
2. Consider the following information of Heidelberg Cement BD Limited.
Item Particulars Explanation
Sales 10 million In 2016
Gross Profit Margin 30% of Continue for 4 Years
Sales
EBIT 16% of Continue for 4 Years
Sales
Total Assets BDT 12000
 Depreciation 5.5% Current assets is 66.5% Total Assets where as non-
current assets is 33.5% of TA
Gross Debt BDT 136 Same for 4 Years
Terminal Growth 2% Continue Forever
rate
Default Risk 1% Has already been Included
Premium
Debt to Equity Ratio 2 Continue for 4 Years
Interest Rate 9% Continue for 4 Years
No of Shares Paid up capital BDT 755 Million and face value is 10TK
Outstanding
Cash BDT 1500
Capex BDT 200 Same for 4 Years
Retention ratio 25% Continue for 4 Years
(** all amount in Million BDT)
Additional Information:
a. Cost of each unit including raw materials 175TK, direct labor 50TK and factory overhead 30TK
and selling price also included 25% margin.
b. Depreciation is not included in operating expenses.
c. Corporate tax rate is 22.50%.
d. In December 2016, Heidelberg Cement BD Limited’s stock had a beta of 1.32. The T-Bill rate
was 7.5% & market risk premium was 6.5%.
Considering the above information, you are asked to calculate-
1. Cost of Equity, Cost of Debt & Weighted Average Cost of Capital (WACC).
2. Intrinsic value per share according to Free Cash Flow & DDM Method.
(Decide whether buy or not if Current Market Price is 408 TK)

Sales Growth Rate

Year 2017 2018 2019 2020
Sales Growth 15% 12% 10% 10%

Math 03

1. Consider the following information of Hamim Textiles (BD) Limited.

Item Particulars Explanation
Sales 8580 Year ended in March 2016
Gross Profit Margin 42% of Sales Continue for 4 Years
Operating Expenses 15% of Sales Continue for 4 Years
 Total Assets BDT 1600
Current assets is 50% of Total Assets
Depreciation Use straight line
method
Gross Debt BDT 550
Initial Growth Rate 9% Continue for 4 Years
Terminal Growth rate 2.5% Continue Forever
Default Risk Premium 2% Continue for 4 Years
Debt to Equity Ratio .50 Continue for 4 Years
Interest Rate 13% Continue for 4 Years
No of Shares 120 Continue for 4 Years
Outstanding
Cash BDT 750
Capex BDT 650 Same for 4 Years
Paying out ratio 30% Continue for 4 Years
(** all amount in Million BDT)
Additional Information:
e. Depreciation is not included in operating expenses & Default risk premium is not
adjusted yet.
f. Corporate tax rate is 27.5%.
g. In March 2016, Hamim Textiles (BD) Limited’s stock had a beta of .95. The T-Bill rate was
7.5% & market return was 13%.
Considering the above information, you are asked to calculate-
 Cost of Equity, Cost of Debt & Weighted Average Cost of Capital (WACC).
 Intrinsic value per share according to Free Cash Flow & DDM Method.

Math 04
1. AMCL (Pran) has earned 22% gross profit margin on revenues of BDT 2092 million in December 31,
2016. However, assume that its future performance will be tracked relative to sales. Sales growth of
AMCL for next 4 years are given and company is now focusing to reduce COSG in coming years.
 Particulars 2012 2013 2014 2015 2016 B 2017P 2018P 2019P 2020P
Sales in million 1479 1554 1727 1887 2092 - - - -
Sales Growth Average Sales Growth= 9% 9% ↑ 12% 12% ↑ 12% ↑
↑
COGS 78% 75% 75% 73% 71%
Additional Information
Items Particulars Explanation
Operating Expenses OE was 216 million in 2016 and will increase by 6% in each year for
(OE) next 4 years
Total Assets BDT 1459 Total Non-current Assets 37.32%. Total
Depreciation 10% Assets and Depreciation will be increased
by 8% every year.
Total Debt BDT 1019 In 2016
Total Equity BDT 544 In 2016
Terminal Growth 5% Continue forever
rate
Credit Risk Premium Has not been adjusted
Interest Rate Risk free rate is 6.43% and inflation is 5.57% and risk premium is 1%.
No of Shares Paid up capital BDT 80 Million and face value is 10TK
Cash BDT 17.72 At the end of December 31, 2016
Capital Expenditure BDT 147 Million on an average in last 3 years. Company has made a
plan to increase CAPEX in line with sales by 10% in each year for next
4 years
Working Capital WC requirements are 5% of the projected increase sales in each
year.
(** all amount in Million BDT)
Additional Information:
h. Corporate tax rate is 25% and in 2016 AMCL paid 3.2TK dividend which is 50.63% of
total EPS.
i. Currently, AMCL’s has a beta of 1.05. Average 5-year T-bond rate is 6.43% & market
return is 12.98%.
Considering the above information, you are asked to calculate-
3. Cost of Equity, Cost of Debt & Weighted Average Cost of Capital (WACC).
4. Calculate 4-year Pro Forma Statement & figure out intrinsic value per share according to
Free Cash Flow (FCF). Today’s Market price is 221 TK, give your decision.

Math 05

5. Consider the following information of Heidelberg Cement BD Limited.

Item Particulars Explanation
Sales 13500 In 2016
 Gross Profit Margin 30% of Sales Continue for 4 Years
EBIT 22% of Sales Continue for 4 Years
Total Assets BDT 12000
Current assets is 66.5% Total Assets where
Depreciation 7.5%
as non-current assets is 33.5% of TA
Gross Debt BDT 136 Same for 4 Years
Initial Growth Rate 12% Continue for 4 Years
Terminal Growth rate 2% Continue Forever
Default Risk Premium 1% Has already been Included
Debt to Equity Ratio 2 Continue for 4 Years
Interest Rate 9% Continue for 4 Years
No of Shares Outstanding Paid up capital BDT 755 Million and face value is 10TK
Cash BDT 1500
Capex BDT 800 Same for 4 Years
Retention ratio 25% Continue for 4 Years
(** all amount in Million BDT)
Additional Information:
j. Depreciation is not included in operating expenses.
k. Corporate tax rate is 24.75%.
l. In December 2016, Heidelberg Cement BD Limited’s stock had a beta of 1.32. The T-Bill rate
was 7.5% & market risk premium was 6.5%.
Considering the above information, you are asked to calculate-
5. Cost of Equity, Cost of Debt & Weighted Average Cost of Capital (WACC).
6. Intrinsic value per share according to Free Cash Flow & DDM Method.
(Decide whether buy or not if Current Market Price is 561.60TK)