Homework Answers
Part 1]
FCF = NOPAT + depreciation - capex - change in NOWC
NOPAT = EBIT * (1 - tax rate)
FCF = $112.20 million
Part 2]
FCF = $205.29 million
Part 3]
Horizon value = FCF in 2023 * (1 + growth rate after 2023) / (WACC - growth rate after 2023)
Horizon value = $10,777.59 million
Part 4]
Firm value today = present value of next 4 years FCF + present value of horizon value
present value = future value / (1 + WACC)number of years
Firm value = $8,778.44 million
Part 5]
Stock price today = (firm value - debt) / shares outstanding
Stock price today = $816.84
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sorry accidently posted 2 photos.
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sorry accidently posted 2 photos.
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