Apple. You have been asked to perform a valuation of Apple shares using the free cash flow approach. Apples free cash flows in the next 5 years are expected to be $81 billion in year 1, $84 billion in year 2, $92 billion in year 3, $104 billion in year 4, and $112 billion in year 5, and are expected to grow at 4% in perpetuity thereafter. The corporate tax rate is 21%. Apple has 16.8 billion shares outstanding and excess cash of $57 billion.

Part 1: Your task is to determine equity value per share for Apple. You do not know how many dollars of debt Apple has borrowed. You should estimate Apples weighted average cost of capital from comparable firm information as shown in the table below. In determining Apples weighted average cost of capital with reference to comparable firms, rely upon medians for the Debt/(Debt + Equity) ratio, the cost of equity and the cost of debt.

Firm	Debt ($b)	Share price ($)	Shares (b)	Cost of Equity	Cost of Debt
HPE	12	16	1.3	10.30%	3.65%
MSFT	72	261	7.5	9.25%	3.00%
DELL	48	101	0.8	10.80%	3.85%
SONY	20	109	1.2	8.85%	2.90%
Samsung	18	73	6.0

Part 2: Suppose you know that Apple has borrowed $500 billion in debt. The dollars of debt will change over time but Apple will maintain the same ratio of Debt/(Debt + Equity) every year. Also, in contrast to part 1, assume the cost of equity is 9% and the cost of debt is 4%. The information from your earlier analysis of comparable firms is irrelevant, but the other Apple information is relevant. What is your estimate of Apples equity value per share?