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(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
(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 $(8,747) million (NNO is negative, which means that Cisco has net nonoperating investments)
Instructions:
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Use your rounded answers for subsequent calculations.
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Round all answers to the nearest whole number, except for discount factors and stock price per share.
- Round discount factors to 5 decimal places.
- Round stock price per share to two decimal places.
- Use a negative sign with your NNO answer.
| CSCO | Reported | Forecast Horizon | Terminal | |||
|---|---|---|---|---|---|---|
| ($ millions) | 2019 | 2020 Est. | 2021 Est. | 2022 Est. | 2023 Est. | Period |
| DCF Model | ||||||
| Increase in NOA | Answer
| Answer
| Answer
| Answer
| Answer
| |
| FCFF (NOPAT - Increase in NOA) | Answer
| Answer
| Answer
| Answer
| Answer
| |
| Discount factor | Answer
| Answer
| Answer
| Answer
| ||
| Present value of horizon FCFF | Answer
| Answer
| Answer
| Answer
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| Cummulative present value of horizon FCFF | Answer
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| Present value of terminal FCFF | Answer
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| Total firm value | Answer
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| NNO | Answer
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| Firm equity value | Answer
| |||||
| Shares outstanding (millions) | Answer
| |||||
| Stock price per share | Answer
| |||||
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