The following information is taken from the annual report of The Coca-Cola Company:

Discuss how the existence of operating-loss carryforwards affects firm value. Discuss how the financial effects of operating-loss carryforwards are reflected in the calculation of firm value using

(a) the discounted cash flow model and

(b) the residual income model.

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We believe our remaining deferred tax assets will be realized because of the existence of suf- ficient taxable income within the carryforward period available under tax law. As of December 31, 2014, our net tax operating loss carryforwards totaled $167 million, of which $21 million expire between 2030 and 2034, and the remainder does not expire.