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. Tropetech Inc. has an expected net operating profit after taxes, EBIT(1 - T), of $2,400 million in the coming year. In addition, the firm is expected to have net capital expenditures of $360 million, and net operating working capital (NOWC) is expected to increase by $45 million. How much free cash flow (FCF) is Tropetech Inc. expected to generate over the next year? $43,481 million $2,085 million O $2,715 million $1,995 million Tropetech Inc.'s FCFs are expected to grow at a constant rate of 3.90% per year in the future. The market value of Tropetech Inc.'s outstanding debt is $11,510 million, and its preferred stocks' value is $6,394 million. Tropetech Inc. has 675 million shares of common stock outstanding, and its weighted average cost of capital (WACC) equals 11.70%. Term Value (Millions) Total firm value Intrinsic 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. Assume the firm has no nonoperating assets. Grade It Now Save & Continue Continue without saving Tropetech Inc.'s FCFs are expected to is $11,510 million, and its preferred st weighted average cost of capital (WAC $17,051.28 ant rate of 3.90% per year in the future. The market value of Tropetech Inc.'s outstanding debt 6,394 million. Tropetech Inc. has 675 million shares of common stock outstanding, and its $98,370.77 b%. -$51,153.85 $25,576.92 Term Total firm value Intrinsic 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. Assume the firm has no nonoperating assets. Grade It Now Save & Continue Continue without saving Tropetech Inc.'s FCFs are expected to arow at a constant rate of 3.90% per year in the future. The market value of Tropetech Inc.'s outstanding debt is $11,510 million, and its preferred st $13,391.92 $6,394 million. Tropetech Inc. has 675 million shares of common stock outstanding, and its weighted average cost of capital (WAC 0%. $19,182.92 $7,672.92 Term $14,066.92 2 Total firm value Intrinsic 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. Assume the firm has no nonoperating assets. Grade It Now Save & Continue Continue without saving Tropetech Inc.'s FCFs are expected to grow at a constant rate of 3.90% per year in the future. The market value of Tropetech Inc.'s outstanding debt is $11,510 million, and its preferred stocks' value is $6,394 million. Tropetech Inc. has 675 million shares of common stock outstanding, and its weighted average cost of capital (WAC $11.37 11.70%. $28.42 Term $20.84 lions) $19.84 Total firm value Intrinsic 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. Assume the firm has no nonoperating assets. Grade It Now Save & Continue Continue without saving