Good Evening!

Can you please explain how to solve this?

You have been assigned by your supervisor to evaluate common shares of Facebook, Inc. (FB). FB does not pay dividends on its common shares. Hence, the only way out is to value FB using forecasts of FCFE. Based on company and industry analysis, you have gathered the following assumptions:

• FB has 2.4 billion shares outstanding.
• Sales will be $70 billion in 2019, increasing at 22% annually for the next four years (through 2023).
• Net income will be 29% of sales.
• Investment in fixed assets will be 27% of sales; investment in working capital will be 7% of sales; depreciation will be 15% of sales.
• 15% of the net investment in assets will be financed with debt.
• Interest expenses will be 3.5% of sales.
• The tax rate will be 35%. FB's beta is 1.23; the risk-free government bond rate is 4.5%; the equity risk premium is 7%.
• At the end of 2023, FB's trailing P/E ratio would be 15 times.

What is the value of a share of FB?

1) 143.82

2) 162.10

3) 171.20

4) 217.86

Thank you!