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Cisco Systems Consolidated Statements of income Years Ended December (5 millions) July 27, 2018 July 21, 2018 Revenue Product 539.00 536.709 Service 129 12621 Total

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Cisco Systems Consolidated Statements of income Years Ended December (5 millions) July 27, 2018 July 21, 2018 Revenue Product 539.00 536.709 Service 129 12621 Total revenue 5190 49210 Cost of sales Product 14.427 Service Total cost of sales 1923 18.224 Gross margin 32666 30.606 Operating expenses Research and development Sales and marketing 9.24 General and administrative 1822 2144 General and administrative 1200 214 Amortization of purchased intangible assets 221 Restructuring and other charges 322 358 Total operating expenses TE 12 297 Operating income 12.300 Interest income 10 1.50 Interest expense 085 0943 Other income dos net 765 Interest and other income foss.net 7230 income before provision for income taxes 14571 13.09 Provision for income taxes 20 12.929 Net income $11621 5110 Com MM 425044 (d) Estimate the value of a share of Cisco common stock using the discounted cash flow (DCF) model as of July 27, 2019; assume a discount rate (WACC) of 7.6%, common shares outstanding of 5,029 million, and net nonoperating obligations (NNO) of $(8,747) million (NNO is negative, which means that Cisco has net nonoperating investments) Instructions: Use your rounded answers for subsequent calculations. Round all answers to the nearest whole number, except for discount factors and stock price per share. Round discount factors to 5 decimal places. Round stock price per share to two decimal places. Use a negative sign with your NNO answer. Forecast Horizon 2021 Est. 2022 Est. Terminal Period 2019 2020 Est. 2023 Est. 302 $ 1,240 $ 10,695 0.92937 9,939.591 1,303 $ 11,229 0.86372 1,368 $ 11.791 0.80272 8,893 x 1,437 12,380 0.74602 8,678 x 13,653 9,113 x CSCO Reported (5 millions) del e in NOA OPAT - Increase in NOA) at factor value of horizon FCFF esent value of horizon FCFF $ 36,022 X value of terminal FCFF 131,819 X m value 192,665 (8,747) juity value $ 201,412 outstanding (millions) 5,029 rice per share $ 40.05

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