1 Corporate valuation Dollars/shares in millions FCF FCF2 FCF3 7 Constant growth rate, gn WACC 9 Market value of debt 10 Common shares outstanding 11 12 13 FCFS 14 Horizon value 15 Total FCFs 16 17 PV of FCFs to investors -$5.00 $20.00 $53.00 8.00% 12.00% $133.00 32 -$5.00 $20.00 $53.00 19 Firm value today Market value of equity, MV Equity Price per share, Po Formulas -$5.00 $20.00 #N/A 3 $53.00 #N/A #N/A FCFS Horizon value Total FCFS 27 28 #N/A #N/A 29 PV of FCFs to investors #N/A #N/A #N/A 31 32 Firm value today #N/A 34 35 36 Market value of equity, MV Equity Price per share, Po #N/A #N/A