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10. Corporate valuation model Aa Aa The corporate valuation model, the price-to-earnings (P/E) multiple approach, and the economic value-added (EVA) approach are some examples of
10. Corporate valuation model Aa Aa The corporate valuation model, the price-to-earnings (P/E) multiple approach, and the economic value-added (EVA) approach are some examples of valuation techniques. The corporate valuation model is similar to the dividend-based valuation that you've done in previous problems, but it focuses on a firm's free cash flows (FCFs) instead of its dividends. Some firms don't pay dividends, or their dividends are difficult to forecast. For that reason, some analysts use the corporate valuation model Stay Swift Corp. has an expected net operating profit after taxes, EBIT(1 T), of $9,600 million in the coming year. In addition, the firm is expected to have net capital expenditures of $1,440 million, and net operating working capital (NOWC) is expected to increase by $50 milion. How much free cash flow (FCF) is Stay Swift Corp. expected to generate over the next year? O $8,210 million O $10,990 million $176,756 million O $8,110 million Stay Swift Corp.'s FCFs are expected to grow at a constant rate of 3.90% per year in the future. The market value of Stay Swift Corp.'s outstanding debt is $46,788 million, and preferred stocks' value is $25,994 million. Stay Swift Corp. has 750 million shares of common stock outstanding, and its weighted average cost of capital (WACC) equals 11.70%. Using the preceding information and the FCF you calculated in the previous question, calculate the appropriate values in this table. Term Value (Millions) Total firm value Value of common equity Intrinsic value per share [ [
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