Problem 3 X Company is assessing the vale of two companies A and B which projects the following net cash flows in the ne

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Problem 3 X Company is assessing the vale of two companies A and
B which projects the following net cash flows in the next five
years, with its desired required return. Net cashflows approximates
to be its earnings also. The balance sheet of A and B Company has
recorded property, plant and equipment of P 100 million and P 200
million respectively. Operating assets are estimated at 80% and 70%
respectively and the rest are considered idle.
Required:
1. Using capitalization of earnings, compute for equity value of
the 2 companies
2. Which company has the higher equity value?
3. What will be the minimum selling price of the two companies
assuming its board of directors decided to sell 20% of its shares
to the public?