Could someone please tell me what to do with this question? Does this mean that I have to do an NPV? Is there anything else I have to do? US treasury rates 5.5%
Netflix Comcast Disney Sep-29-2018 Sep-28-2019 Viacom Sep-30-2018 Sep-30-2017 Dec-31-2017 Dec-31-2018 Sep-30-2019 Dec-31-2017 Dec-31-2018 Sep-30-2019 Sep-30-2017 Sep-30-2019 Cash flow from operating activities: Net Income Depreciation & Amortization Change in Working Capital Other Operating Activities Cash from Operation 8,980.0 2,782.0 (266.0) 847.0 12,343.0 12,598.0 3,011.0 (502.0) (812.0) 14,295.0 11,054.0 4,160.0 23.0 (8,631.0) 6,606.0 558.9 71.9 74.6 (2,491.3) (1,785.9) 1,211.2 83.2 199.2 (4.174.1) (2,680.5) 1,413.9 99.0 (13.0) (4,160.3) (2,660.5) 22,735.0 10,130.0 (696.0) (10,908.0) 21,261.0 11,731.0 11,017.0 (1,196.0) 2,745.0 24,297.0 12,406.0 12,973.0 (1,675.0) 1,548.0 25,252.0 1,874.0 223.0 (339.0) (53.0) 1,705.0 1,719.0 213.0 (295.0) 185.0 1,822.0 1,548.0 215.0 (76.0) (111.0) 1,576.0 (3,623.0) (4,465.0) (4,876.0) (173.3) (173.9) (215.4) (9,621.0) (10,234.0) (10,972.0) Cash from investing acitvities: Capital Expenditure Sale of Property, Plant, & Equipment Cash Acquisitions Other Investing Activities Cash from Investing (195.0) 848.0 (378.0) 54.0 (417.0) (71.0) (4,111.0) (1,881.0) 710.0 (5,636.0) (9,901.0) 10,659.0 (4,118.0) 207.6 34.3 (178.0) 57.0 (112.0) 9.0 (224.0) (532.0) (3,380.0) (13,533.0) (165.2) (339.1) (194.0) 5.0 (424.0) 5.0 (608.0) (38,219.0) (2,401.0) (50,854.0) (44.4) (259.8) (38,312.0) (3,892.0) (53,176.0) 329.0 3,961.9 3,197.0 36,362.0 22,436.0 (1,320.0) 3,677.0 318.0 3,020.5 88.4 4,305.0 68.3 (783.0) 172.0 (1,000.0) 2.0 124.5 Cash flow from financing activities: Increase (Decrease) in Debt Issuance of Common Stock Repurchase of Common Stock Total Dividends Paid Other Financing Activities Cash from Financing 3,703.0 276.0 (9,368.0) (2,445.0) (1,125.0) (8,959.0) (2,583.0) 210.0 (3,577.0) (2,515.0) (378.0) (8,843.0) (2,895.0) (2.190.0) (1,090.0) (5,435.0) (2,883.0) (2,451.0) (7,572.0) (5,320.0) (3,352.0) (550.0) 27,140.0 (1,470.0) (3,643.0) (143.0) 17,180.0 (31.9) 3,077.0 (37.8) 4,048.6 (37.6) 4,335.8 (319.0) (114.0) (1,044.0) (322.0) (90.0) (1,410.0) (322.0) (102.0) (1,744.0) (21.0) Foreign Exchange Rate Adjusted Net Change in Cash 31.0 (696.0) (25.0) (209.0) (98.0) 1,300.0 29.8 1,355.2 (39.7) 989.3 (34.3) 1,381.2 (245.0) 338.0 (276.0) (11,020.0) 20.0 1,010.0 (20.0) 168.0 156.0 (797.0) The date is November 7, 2019 (do not use data after that date) unless otherwise specified. e.g. don't include the pandemic in your analysis unless otherwise specified. a. 10 marks. Value Disney using the discounted free cash flow methodology (Max 1 page) i. Assume that Disney's 1. Cost of Equity is 10% 2. Cost of Debt is 1% higher than 12-month US Treasuries 3. Tax rate is 25% ii. Please clearly state your assumptions iii. Please do your FCF forecast from 2020-2021 and then calculate a terminal value Netflix Comcast Disney Sep-29-2018 Sep-28-2019 Viacom Sep-30-2018 Sep-30-2017 Dec-31-2017 Dec-31-2018 Sep-30-2019 Dec-31-2017 Dec-31-2018 Sep-30-2019 Sep-30-2017 Sep-30-2019 Cash flow from operating activities: Net Income Depreciation & Amortization Change in Working Capital Other Operating Activities Cash from Operation 8,980.0 2,782.0 (266.0) 847.0 12,343.0 12,598.0 3,011.0 (502.0) (812.0) 14,295.0 11,054.0 4,160.0 23.0 (8,631.0) 6,606.0 558.9 71.9 74.6 (2,491.3) (1,785.9) 1,211.2 83.2 199.2 (4.174.1) (2,680.5) 1,413.9 99.0 (13.0) (4,160.3) (2,660.5) 22,735.0 10,130.0 (696.0) (10,908.0) 21,261.0 11,731.0 11,017.0 (1,196.0) 2,745.0 24,297.0 12,406.0 12,973.0 (1,675.0) 1,548.0 25,252.0 1,874.0 223.0 (339.0) (53.0) 1,705.0 1,719.0 213.0 (295.0) 185.0 1,822.0 1,548.0 215.0 (76.0) (111.0) 1,576.0 (3,623.0) (4,465.0) (4,876.0) (173.3) (173.9) (215.4) (9,621.0) (10,234.0) (10,972.0) Cash from investing acitvities: Capital Expenditure Sale of Property, Plant, & Equipment Cash Acquisitions Other Investing Activities Cash from Investing (195.0) 848.0 (378.0) 54.0 (417.0) (71.0) (4,111.0) (1,881.0) 710.0 (5,636.0) (9,901.0) 10,659.0 (4,118.0) 207.6 34.3 (178.0) 57.0 (112.0) 9.0 (224.0) (532.0) (3,380.0) (13,533.0) (165.2) (339.1) (194.0) 5.0 (424.0) 5.0 (608.0) (38,219.0) (2,401.0) (50,854.0) (44.4) (259.8) (38,312.0) (3,892.0) (53,176.0) 329.0 3,961.9 3,197.0 36,362.0 22,436.0 (1,320.0) 3,677.0 318.0 3,020.5 88.4 4,305.0 68.3 (783.0) 172.0 (1,000.0) 2.0 124.5 Cash flow from financing activities: Increase (Decrease) in Debt Issuance of Common Stock Repurchase of Common Stock Total Dividends Paid Other Financing Activities Cash from Financing 3,703.0 276.0 (9,368.0) (2,445.0) (1,125.0) (8,959.0) (2,583.0) 210.0 (3,577.0) (2,515.0) (378.0) (8,843.0) (2,895.0) (2.190.0) (1,090.0) (5,435.0) (2,883.0) (2,451.0) (7,572.0) (5,320.0) (3,352.0) (550.0) 27,140.0 (1,470.0) (3,643.0) (143.0) 17,180.0 (31.9) 3,077.0 (37.8) 4,048.6 (37.6) 4,335.8 (319.0) (114.0) (1,044.0) (322.0) (90.0) (1,410.0) (322.0) (102.0) (1,744.0) (21.0) Foreign Exchange Rate Adjusted Net Change in Cash 31.0 (696.0) (25.0) (209.0) (98.0) 1,300.0 29.8 1,355.2 (39.7) 989.3 (34.3) 1,381.2 (245.0) 338.0 (276.0) (11,020.0) 20.0 1,010.0 (20.0) 168.0 156.0 (797.0) The date is November 7, 2019 (do not use data after that date) unless otherwise specified. e.g. don't include the pandemic in your analysis unless otherwise specified. a. 10 marks. Value Disney using the discounted free cash flow methodology (Max 1 page) i. Assume that Disney's 1. Cost of Equity is 10% 2. Cost of Debt is 1% higher than 12-month US Treasuries 3. Tax rate is 25% ii. Please clearly state your assumptions iii. Please do your FCF forecast from 2020-2021 and then calculate a terminal value
