10. Corporate valuation model

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. Blur Corp. has an expected net operating profit after taxes, EBIT(1 - T), of $4,200 million in the coming year. In addition, the firm is expected to have net capital expenditures of $630 million, and net operating working capital (NOWC) is expected to increase by $20 million. How much free cash flow (FCF) is Blur Corp. expected to generate over the next year? O $4,810 million $3,590 million $85,240 million $3,550 million Blur Corp.'s FCFs are expected to grow at a constant rate of 3.54% per year in the future. The market value of Blur Corp.'s outstanding debt is $22,564 million, and preferred stocks' value is $12,535 million. Blur Corp. has 300 million shares of common stock outstanding, and its weighted average cost of capital (WACC) equals 10.62%. Value (Millions) Term Total firm value Value of common equity Intrinsic value per share Using the preceding information and the FCF you calculated in the previous question, calculate the appropriate values in this table