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Question $4$

An investor is making the valuation of the company GTV$.$ In $2021,$ the company had sales and EBIT of $60,000$ and $4,500,$ respectively. The investor's estimates for future sales and net financial expenses of the company are reported in Table $1.$

The investor has the additional assumptions: EBIT margin $(\%$ sales$)$: increase of $35$ basis points $(0\mathrm{.}35\%)$ per year until $2024,$ included, and decrease of $20$ basis points $(0\mathrm{.}20\%)$ per year in $2025$ and $2026.$ Depreciations: $5\%$ of sales, all years.

Recurrent Capital Expenditure: $8\%$ of sales for $2022$ with percentage decreasing $75$ basis points $(0\mathrm{.}75\%)$ per year until $2025,$ included.

Change in working capital: $9\%$ of yearly change of sales. Tax rate: $20\%.$

Expected rate of return on assets $(Ra)$:$12\%.$

To answer the following questions, make plausible assumptions if necessary.

A$.$ Compute the yearly expected Capital Cash Flows $($CCF$)$ for the period from $2022$ until $2026.$ Present your result rounded to

zero decimal places. Explain your answer.

B$.$ Assume the expected nominal growth rate of CCF in perpetuity is $1\mathrm{.}95\%.$ What is the expected enterprise value of GTV at the

end of year $2022?$ Present your result rounded to zero decimal places. Explain your answer.

C$.$ The expected net debt, minority interests and financial investments at year$-$end $2022$ are $12,500,2,460,$ and $3,500$

respectively. GTV has $2,500$ shares. The current market price of GTV is $11\mathrm{.}70$ per share. Considering the investor's

estimations, what should be the investment recommendation regarding GTV equity shares? Explain your answer.

D$."$In order to properly value stand$-$alone basis projects, it is necessary to use DCF models that disentangle investment and

financing decisions." Is this statement true or false? Explain your answer.

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