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Eastboro Machine Tools - Class
Eastboro Machine Tools - Class
Sources:
14 Net Income 18.1 40.0 57.5 72.8 91.3 98.0 160.0 537.6929
15 Depreciation 22.5 25.5 30.0 34.5 40.5 46.5 52.5 252.0
16 Total Sources 40.6 65.5 87.5 107.3 131.8 144.5 212.5
Uses:
17 Capital Expenditures 43.8 50.4 57.5 66.2 68.5 78.8 90.6
18 Working Capital 19.5 22.4 25.8 29.6 34.0 38.5 44.3
19 Total Uses 63.3 72.8 83.3 95.8 102.4 117.3 134.9 669.8
20 Excess Cash (Borrowings) (22.7) (7.3) 4.2 11.5 29.4 27.2 77.6 119.9
21 Dividends 3.6 8.0 11.5 14.6 18.3 19.6 32.0 107.5
22 Net (26.3) (15.3) (7.3) (3.0) 11.1 7.6 45.6 12.40
23 Cumulative Source (Need) (26.3) (41.6) (48.9) (51.9) (40.8) (33.2) 12.4
24 Int. Cost-New Debt (1.4) (2.2) (2.6) (2.7) (2.2) (1.8) 0.7 -12.17
25 Net Source (Need) (27.7) (43.8) (51.5) (54.7) (43.0) (35.0) 13.1
26 Debt (Excess) 108.0 125.5 135.3 141.1 132.2 126.3 80.0 80.03
Stock buy back
27 Equity 295.6 325.4 368.9 424.4 495.2 571.9 700.5 700.53
28 Debt/Equity 36.5% 38.5% 36.7% 33.3% 26.7% 22.1% 11.4% 11.425%
29 Unused Debt Capacity 10.3 4.7 12.2 28.6 65.9 102.4 200.2 200.18
30 Return on Avg. Equity 5.8% 12.2% 15.8% 17.7% 19.4% 18.0% 25.2%
31 EPS $0.90 $2.03 $2.95 $3.77 $4.79 $5.17 $8.64
32 Implied Stock Price $29.64 $67.11 $97.49 $124.25 $158.15 $170.75 $285.00
33 Dividends Per Share $0.19 $0.43 $0.62 $0.78 $0.98 $1.05 $1.72
Return to Investor:
34 Stock Value (Terminal) $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $285.00
35 Dividend Received $0.19 $0.43 $0.62 $0.78 $0.98 $1.05 $1.72
36 Total Cap. Apprec. & Divs ($22.15) $0.19 $0.43 $0.62 $0.78 $0.98 $1.05 $286.72
37 NPV (@ 12%) $110.09
38 Return (IRR) 45.1%
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EASTBORO MACHINE TOOLS CORPORATION
Common Assumptions
1 Sales Growth 15.0%
2 Net Income Margin 2.1% 4.0% 5.0% 5.5%
3 Dividend Payout 40.0% 40.0% 40.0% 40.0%
4 Beginning Debt 80.3
5 Beginning Equity 282.5
6 Shares Outstanding 18.6
7 Price Earnings Ratio 33.0
8 Current Market Price $22.15
9 Debt/Equity Maximum 40.0%
10 Borrowing Rate 8.0%
11 Tax Rate 34.0%
Sources:
14 Net Income 18.1 40.0 57.5 72.8
15 Depreciation 22.5 25.5 30.0 34.5
16 Total Sources 40.6 65.5 87.5 107.3
Uses:
17 Capital Expenditures 43.8 50.4 57.5 66.2
18 Working Capital 19.5 22.4 25.8 29.6
19 Total Uses 63.3 72.8 83.3 95.8
Return to Investor:
34 Stock Value (Terminal) $0.00 $0.00 $0.00 $0.00
35 Dividend Received $0.39 $0.86 $1.24 $1.57
36 Total Cap. Apprec. & Divs. ($22.15) $0.39 $0.86 $1.24 $1.57
37 NPV (@ 12%) $108.86
38 Return (IRR) 45.5%
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0.10
0.20
0.30
0.40
PORATION
Total
2005 2006 2007 2001-07
$1,521.6 $1,749.9 $2,012.4
50
91.3 98.0 160.0 537.7
40.5 46.5 52.5 252.0
131.8 144.5 212.5 789.7
Sources:
14 Net Income 9.4 30.0 46.0 59.5
15 Depreciation 22.5 25.5 30.0 34.5
16 Total Sources 31.9 55.5 76.0 94.0
Uses:
17 Capital Expenditures 43.8 50.4 57.5 66.2
18 Working Capital 19.5 22.4 25.8 29.6
19 Total Uses 63.3 72.8 83.3 95.8
Return to Investor:
34 Stock Value (Terminal) $0.00 $0.00 $0.00 $0.00
35 Dividend Received $0.10 $0.00 $0.00 $0.15
36 Total Cap. Apprec. & Divs ($22.15) $0.10 $0.00 $0.00 $0.15
37 NPV (@ 12%) $89.42
38
RPORATION
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