How are free cash flow and the weighted average cost of capital calculated? Please forecast and discount the free cash flows to estimate the value of PCP.

Berkshire Hathaway's cost of equity was 9.2%, which reflected a beta of 0.90, an expected market return of 9.90%, and a risk-free rate of 2.89%. The yield on corporate bonds rated A.A was 3.95% - and after a 39% expected marginal tax rate, the cost of debt would be 2.3%. Weights of capital were 16.9% for debt and 83.1% for equity. In contrast, the beta for PCP was 0.38. Analysts expected that PCP's cash flows would grow indefinitely at about the long-term expected real growth rate of the U.S. economy, 2.5%.

Exhibit 9
Warren E. Buffett, 2015
PCP Consolidated Financial Statements
(In millions, except per share data, unless otherwise specified)	12 months ending March 31
	2013	2014	2015
Revenue	$8,347	$9,533	$10,005
Operating expenses1	6,188	6,874	7,393
Income from operations	2,159	2,659	2,612
Net interest expense	31	71	65
Income before income tax expense	2,128	2,588	2,547
Income tax expense	695	830	816
Consolidated net income from continuing operations2	$1,433	$1,758	$1,731
	12 months ending March 31
(In millions, except per share data, unless otherwise specified)		2014	2015
Assets:
Current assets		$5,507	$5,972
Net property, plant and equipment		2,300	2,474
Other assets		10,779	10,982
Total assets		$18,586	$19,428
Liabilities & Shareholder Equity:
Current liabilities		$1,608	$2,827
Long-term debt		3,569	3,493
Pension obligation		442	678
Other long-term liabilities		1,554	1,473
Total liabilities		7,173	8,471
Shareholders' equity3		11,413	10,957
Total liabilities and stockholders equity		$18,586	$19,428
*Note: Fiscal year ends March 31. Period listed as 2015 represents March 31, 2014, to March 31, 2015.
	12 months ending March 31
	2013	2014	2015
Supplemental:
Depreciation & amortization	$215	$293	$325
Capital expenditures1	$323	$355	$457
Net working capital2	$3,368	$3,899	$3,145
Increase in net working capital (decrease)	$653	$531	($754)