1 Current cash flows details of the company are as provided.

Use these assumptions to estimate the FCFF for cu

period. Project the cash flow based on a 3 stage FCFF modeland compute the Intrinsic Value per share
model. Current period should not be considered for the valuation purpose. Net income for the company
is 35%and there is a debt on the books of the company worth 5000 at 10% interest rate. Depreciation ch
current period is 125 and the capex done b the company is 225. Working capital decreased by 50 during
No additional borrowings or repayment was done by the company.The company's total shareholders eq
the cost of equity is 15%. Company's FCFF is expected to grow at 10% for the next 3 years then linearly de
next 5 years and remain constant at 5% forever. Company is not having any cash on its books. Number o
company are 500

Solution for the answer

25.17
stimate the FCFF for current
rinsic Value per share as per theFCFF
come for the company is 750, Tax rate
t rate. Depreciation charged during the
ecreased by 50 during the current year.
total shareholders equity is 12000 and
years then linearly decline to 5% in the
n its books. Number os shares with the
2 Following are the details of revenu from 2 segments for a company .Segment 1 year 1 3000 y
Segment 2 year 1 1500 year 2 1400 year 3 2000.Both segment has worked at a gross margin
and 10% for segment 2 for all the three years . The selling and adminstration expenses have
the revenues for each year . The company additionally has a debt of 3400 since year 1 to yea
interest rate of 9%. Debt will be repaid at the end of five years . Company has fixed asset of
These were depriciated at 5% each year. The tax rate for the company is 35%. Complete the
the company based on the given data and compute the net profits for the year 3 . Don’t assu
Tax losses if any are not carried forward.

Solution for the question

61
 y .Segment 1 year 1 3000 year2 3500 year 3 4500.
worked at a gross margin of 25% for segment 1
minstration expenses have remained at 10% of
of 3400 since year 1 to year 3 which has an
ompany has fixed asset of 5500 for all 3 years .
pany is 35%. Complete the income statement for
s for the year 3 . Don’t assume any interest income

e question
3 Following are the details of the IT Company revenu for the past 3 years year 1 12000, year 2
million INR. 40 % of the revenue comes from onsite and remaining from offshore. The numb
working onsite is 15% of total employee strength every year . The employee count for the co
is 5000, 6000 and 6800. The onsite utilization is 87% for all 3 years. The offshore utilization h
lower than onsite utilization . Assuming that the onsite and offshore billing rates per hour in
year, project revenues for the next three years. Assume 250 working days per year and 8 ho
day.Company expects to add 500 employees every year . 15% of the total employees would
offshore. Utilization rates are expected to remain same for both onsite and offshore as that
3 years. What is the revenue for year 6.

Solution for the question

22020
 years year 1 12000, year 2 14500, year 3 17000
g from offshore. The number of employees
employee count for the company each year
s. The offshore utilization has been 2000 bps
ore billing rates per hour increase at 2% per
ing days per year and 8 hours of working every
he total employees would be onsite, others
nsite and offshore as that in year 3, for the next

tion for the question

22020