Free Cash Flow to Firm - Steps 1.Forecast the sales 2.Forecast the operating profits. 3.Forecast the taxes as a percentage of the operating profit 4.Calculate the net operating profit after taxes (NOPAT) 5.Add back depreciation 6.Subtract the capital expenditures 7.Subtract the investment in additional net working capital (NWC) 8.Calculate the free cash flow to the firm 9.Calculate the weighted average cost of capital (the discount rate) 10.Calculate the terminal value at the end of Year 5 11.Discount all of the free cash flow back to the present 12.Sum the present values 13.Add the value of any nonoperating assets 14.Add the value of any excess cash 15.Subtract the value of debt 16.Subtract any other debt that was not captured by the DCF analysis 17.Calculate the value of the equity on a per share basis Free Cash Flow to Firm Putting Together the FCFF Model Sales for the year that just ended: $48.9 billion Sales growth for next five years: 4 percent Sales growth after Year 5: 3.75 percent Operating margins = 33 percent Tax rate = 22 percent Net margins = 24 percent Debt = $25 billion Pre-tax cost of debt = 4:54 percent Number of shares outstanding = 5 billion Book value of equity: $61.05 billion Book value of assets: $86.05 ROA (calculated as NOPAT1/Equity0): 15.21 percent Percentage of NOPAT that must be reinvested (calculated as growth rate/ROA): Reinvestment rate Years 1 5: 26.29 percent Reinvestment rate after Year 5: 24.65 percent Market value of equity: $150 billion Market value of debt: $25 billion Cost of Equity = 9:5 percent WACC = (6/7)(9:5%) + (1/7)(4.54% )(1 .22) = 8.65% Please show work