Amazon Inc is a listed company on the NASDAQ (Ticker: AMZN). Refer to the attached excel for a snippet of the Balance Sheet and Income Statement of Amazon for FY2017-2019. (Excel sheet link -https://drive.google.com/file/d/1WFckyVMWaruCtXLMpF5U0kdWX6SUArT9/view?usp=sharing )

Being the finance manager, you are required to make a cash flow forecast for Amazon using the Discounted Cash Flow (DCF) approach and come up with a meaningful estimate of its share price.

In addition to the financial statement data, the following is the relevant information is also available about the business:

Forecast period: 5 years

Revenue growth for forecast period to be same as average revenue growth for last three years

Expenses/Sales ratios for forecast period to be same as average expense/sales ratio for last three years

Corporate tax rate: 21%.

Forecast change in working capital to be taken as the average of the change in working capital over the last two financial years.

Forecast depreciation to be same as last year's depreciation.

No additional capital expenditure to be made during the forecast period.

Weights of debt and equity to remain the same as those of last year.

Beta of the stock to be computed using the share price and Nasdaq index data for last three years also provided in the excel document. Necessary adjustments to be made in the beta computation.

Risk-free rate, Rf: 1%, Market Return, Rm: 7%

No of Shares outstanding: 504 million

Terminal growth rate: 3%

Compute the following:

i.Beta of the AMZN stock. (5 marks)

ii.Weighted average cost of capital of the company (5 marks)

iii.Terminal value of the projection period (15 marks)

iv.Enterprise value of the firm (5 marks)

v.Implied share price as per your calculations (10 marks)