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In this project, we will use Free Cash Flow Valuation method to value Amazon.com, Inc. based on the past 10 years financial data. I have

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In this project, we will use Free Cash Flow Valuation method to value Amazon.com, Inc. based on the past 10 years financial data. I have posted financial information of Amazon from 2010 to 2019 on Canvas. Please use the financial information posted and the information below to find the equity value per share for Amazon using FCFF and answer the questions below. 1. Please follow the steps and method used in the Walt Disney example in handout 4 to find out the equity value per share for Amazon. For cash flow after 2025, you apply multiple stage model based on your own estimation and do not copy Walt Disney example for that part. (calculation: 20 points) 2. In the financial information "key stats" table, it provides the estimated total revenue growth rates for year 2020-2022. Also, in the Free Cash Flow Valuation model, you need to project the FCFF growth rates after 2025. Please provide an analysis report for Amazon to support your projection of future growth rates, and to justify whether the estimated total revenue growth rates for 2020-2022 are reasonable. Make sure your analysis report to include the impact of Covid-19 and US-China trading war, and any other factors you think may affect Amazon's future business. (20 points) 3. The cost of equity of Amazon is 9.46%. 4. After you find out the equity value per share for Amazon, please do sensitivity analysis. Increase/decrease your WACC by 1% each time, up to total 13%. Increase/decrease your long-term growth rate by 0.5% each time, up to total +2%. Which factor(s) is your equity value most sensitive to? (5 points) 5. Compare your equity value to the stock price on Dec. 31, 2019, conclude whether Amazon stock is undervalued, fairly valued or overvalued. Do you recommend buying or selling this stock? (2 points) 6. If you can choose between FCFF and FCFE to value Amazon, which one do you choose and why? (3 points) All the calculation must be done in the excel file. Please submit your excel file, and a separate write-up file (either .doc or pdf file) via Canvas. Write-up file should be no more than 3 pages (appendix and references are not count as part of the 3-page limits)

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