Table 1.0 Income 2020 2021 2022 2023 Statement Ghc Ghc Ghc Ghc Revenue 3,000,000.00 3,300,000.00 3,600,000.00 4,000,000.00 Cost of Goods 1,800,000.00 1,900,000.00 2,000,000.00 2,200.000.00 Sold Depreciation 300,000.00 360,000.00 390,000.00 420,000.00 EBIT 900,000.00 1,040,000.00 1,210,000.00 1,380,000.00 Interest 300,000.00 300,000.00 300,000.00 300.000.00 EBT 600,000.00 740,000.00 910,000.00 1,080,000.00 Taxes 180,000.00 222,000.00 273,000.00 324,000.00 Net Income 420,000.00 518,000.00 637,000.00 756,000.00 Table 2.0 2020 2021 2022 2023 Capital Exp. Changes in Net 200,000.00 220,000.00 328,000.00 200,000.00 350,000.00 277,000.00 430,000.00 326.000.00 Working Capital
Green Leaf Limited is an IT company operating in Ghana. The main business of Green Leaf is
assembling of personal computer from components that are imported from India and China.
Recently, the company has expanded its business activities to include the assembling of
smartphones. Its shares are actively traded on the Ghana Stock Exchange. The beta of Green
Leaf Company Limited’s equity is 20% higher than the beta of the whole market. The company’s
current debt-to-equity ratio is 50%. Green Leaf’s management has
for the next four fiscal years. These projections are given in the table below. In addition, Green
Leaf’s management plans to have capital expenditures and changes of net working capital in the
coming four fiscal years as stated in the second table. Green Leaf’s outstanding debt is risk-free.
Risk free
corporate tax is 30%.
The management assumes that Green Leaf’s business will increase only at a 2% compound
growth rate after 2023 as the extraordinary growth in the market for smartphones is not expected
to be sustainable after 2023.
Determine Green Leaf’s Expected
to 2023. FCFF = EBIT – Taxes + Depreciation – ΔNWC – CE and Green Leaf Equity Cost of Capital under the new proposed capital structure.
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
Unlock instant AI solutions
Tap the button
to generate a solution
