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Projections, 2007
Particulars 2004 2005 2006 2007
EBITDA 69370 68895 73860 83765
Depreciation 6987 8213 9914 10211
Other Income 15719 16057 13506 0
EBIT 78102 76739 77452 73553
Interest Expense 0 0 0 3375
EBT 78102 76739 77452 70178
Tax 24989 24303 23821 28071
Net Income 53113 52436 53631 42107
Shares Outstanding 41309 48970 59052 45052
EPS 1.29 1.07 0.91 0.93
Equity 417377 458538 488363 253018
ROE 0.13 0.11 0.11 0.17
Dividend 18589 22871 28345 18452.32
• Asset base has decreased substantially due to the cash being used for share repurchase
• Shareholder’s Equity has also declined due to the outstanding shares being repurchased
Shareholding Structure:
1. Debt has a lower cost of capital 1. The company's asset base will
2. Increase leverage - invest in its decrease – it would have to borrow
business without increasing money if it wants to acquire
shareholders' equity another company or expand its
3. Deliver better return on equity production
4. Increased control for family 2. Increasing long-term debt may
members - reversing downward cause financial distress - larger
trend from IPO. portion of its EBIT is used to pay for
5. More flexibility in setting future interest expenses.
dividends per share 3. Loss of control for smaller
shareholders as family ownership
rises to 81%
4. Volume is reduced- reducing
liquidity of the stock is reduced in
the secondary markets