Question
Conduct a two-stage valuation You can now combine the two items above to estimate a present value of the firm. You should calculate a high-growth
Conduct a two-stage valuation You can now combine the two items above to estimate a present value of the firm.
You should calculate a high-growth phase value and a terminal value.
High Growth Phase Value: For this phase, assume that in years 1 - 3 the Free Cash Flows are growing by 8% annually.
Terminal Value: For this phase assume the FCF grow at a constant growth rate of 2.5%.
Calculate the present values of the above phases and add them together for the total present value of the company.
For the FCF I was able to caluclate : $92,213.27
For WACC I was able to calculate: 13.25
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| Dec14 | Mar15 | Jun15 | Sep15 | Fiscal Year 2015 |
| Net Income from Continuing Operations | $18,024.00 | $13,569.00 | $10,677.00 | $11,124.00 | $53394.00 |
| Depreciation, Depletion and Ammortization | $2,575.00 | $2,479.00 | $3,084.00 | $3,119.00 | $11257.00 |
| Change in Working Capital | $10,038.00 | $2,424.00 | -$570.00 | -$245.00 | $11647.00 |
| Deferred Tax | $2,197.00 | -$318.00 | $941.00 | -$1,438.00 | $1382.00 |
| Cash flow from Discontinued Operations | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 |
| Stock Based Compensation | $888.00 | $927.00 | $856.00 | $915.00 | $3586.00 |
| Cash Flow from Others | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 |
| Cash Flow from Operations | $33722.00 | $19081.00 | $14988.00 | $13475.00 | $81266.00 |
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| Cash Flow for Capital Expenditures | -$3,265.00 | -$2,476.00 | -$2,089.00 | -$3,658.00 | -$11,488.00 |
| Interest Expense | -$131.00 | -$163.00 | -$201.00 | -$238.00 | -$733.00 |
| Tax Rate |
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| 26.23% |
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| Calculating Free Cash Flow | Cash flow from operations-Cash flow from capital expenditures | +interest expense | *(1-tax rate) |
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| Apple Free Cash Flow for 2015 Fiscal Year |
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| $92,213.27 |
| WACC: |
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| 13.25% |
I have no idea what to do now?!
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Technology And Finance Challenges For Financial Markets Business Strategies And Policy Makers
Authors: Morten Balling, Frank Lierman, Andy Mullineux
1st Edition
041529827X, 978-0415298278
