Assume you are the CEO of the Class Case Company of which the
financial statement plus additional financial information are
attached. You know that you are responsible to within the context
of triple bottom line approach
grow the Class Case Company sustainably. This lead you to wonder how to manage the finances of the
company over the next four years for the share price to be at the end of the period at fair value and what the
share price should be under this circumstances at the end of the four years.
Considering the above you realised that you need to:
• Grow the company at the minimum at the sustainable growth rate over the next four years; (10)
• Consider risk oth in a systematic and unsystematic context -
in unsystematic context specifically to give an indica ion of what the variation of rate of return may be; (25)
• Should consider aspects related to the Free Cash Flow (FCF), Net Asset Value (NAV) and Price Earnings (PIE)
valuation procedures to give some indication on whether the current share price based
on historic financial information supplied is in equilibrium on the date as reflected in the financial year
end statements; and (40)
• Consider the equilibrium share price to be determined under the previous bullet to give some direction
in terms of what you need to do to achieve your goal.