(ii). Free Cash Flow to Equity (FCFE) Model (Topic 8 Part II)

Estimate the intrinsic value of the companys shares using the Free Cash Flow to Equity (FCFE) model

You must use a 3 stage FCFE model to calculate the intrinsic value of the stock

Source the components for FCFE from the companys financial statements using Eikon

Calculate the FCFE per share over the past 5 years. The average

growth in FCFE per share will be the growth rate for Period 1

Formula FCFE = Net Income + (Depreciation Expense Capital Expenditures) - in Working Capital - Principal Debt Repayments + New Debt Issues OR FCFE = Cash from Operating Activities Capital Expenditures + Net Debt Issued (Repaid)

Estimate the growth of FCFE for Period 2 using your macro and micro-analysis.