Note: When entering intermediate calculations, round to two decimal places, but do not round the intermediate calculations when determining final answers. Round all percentages to two decimal places. After discussing the different aspects of the valuation, Slim puts together his FCF projections. Complete the missing elements from his projection: Note: When entering intermediate calculations, round to the nearest whole number, but do not round the intermediate calculations when determining final answers. For example: If the revenue growth rate is 11\%, and the answers for revenue for 2012-2014 are 1103, 1224.33, and 1359.0063, then you should enter 1103,1224 , and 1359 as answers, but use 1359.0063 to calculate the revenue for 2015 . If your answer is negative, use a minus (-) sign. Balance Sheet Income Statement Statement of Stockholder's Equity Statement of Cash Flows 2011 2010 2009 (in millions) (in millions) (in millions) Source: Facebook Inc. Prospectus. United States Securities and Exchange Commission, 17 May 2012. Web. 1 June 2012. http://www.sec.gov/Archives/edgar/data/1326801/000119312512240111/d287954d424b4.htm Itoc The value of total long-term liabilities that FB reported in 2011 was milion. Thus, using the firm's value, the derived equity value will be stock in 2012. Thus, the value of each stock, rounded to two decimal places, is According to the SEC filings, FB stock's IPO was priced at $38.00 per share. If Slim strictly follows the theoretical rules of investing, based on his analysis, what strategy would he recommend to investors interested in FB's stock as an asset in their short-term investment portfolio? Slim Perkins, a business journalist, is a recent hire at his firm. Since he joined the firm, he has been following Facebook Inc.'s (FB) initial public offering (IPO) and the stock's performance. His task is to estimate Facebook's fair market value, also referred to as "intrinsic" value, and compare this value with the current stock price, and recommend a buy, sell, or hold rating to investors. Slim pulls the company's consolidated financial statements to collect relevant data on the company's historical financial performance. He notices that the company assumes a 45% marginal tax rate after the IPO, and mentions that the company projects that user rates and revenue growth will decline over time. Slim starts his evaluation by calculating ratios of costs and expenses to revenues, interest expense to revenues, and others that will form the set of assumptions in his analysis which will be used to calculate free cash flows. Balance Sheet Income Statement Statement of Stockholder's tquity Statement of Cash Hows 2011 2010 2009 (in millions) (in millions) (in millions) Cash flows from operating activities Net income $1,000 $606 $229 Adjustments to reconcile net earnings to net cash from operating activities: Depreciation and amortization Loss on write-off of assets Share-based compensation Other adjustments Changes in assets and liabilities: Accounts receivable (174) (209) (112) Prepaid expenses and other current assets (31) (38) (30) Other assets (32) 17 (59) Accounts payable Platform partners payable Accrued expenses and other current liabilities Deferred revenues and deposits Other liabilities Net cash provided by operating activities Cash flows from investing activities Purchases of property and equipment $(606) $(293) $(33) Purchases of marketable securities Maturities of marketable securities Sales of marketable securities Investments in non-marketable equity securities (7) Acquisitions of business, net of cash acquired (3,025) Change in restricted cash and deposits 516 Net cash used in investing activities 113 (3) 12 78 1 27 (1) Cash flows from financing activities Note: When entering intermediate calculations, round to two decimal places, but do not round the intermediate calculations when determining final answers. Round all percentages to two decimal places. After discussing the different aspects of the valuation, Slim puts together his FCF projections. Complete the missing elements from his projection: Note: When entering intermediate calculations, round to the nearest whole number, but do not round the intermediate calculations when determining final answers. For example: If the revenue growth rate is 11\%, and the answers for revenue for 2012-2014 are 1103, 1224.33, and 1359.0063, then you should enter 1103,1224 , and 1359 as answers, but use 1359.0063 to calculate the revenue for 2015 . If your answer is negative, use a minus (-) sign. Balance Sheet Income Statement Statement of Stockholder's Equity Statement of Cash Flows 2011 2010 2009 (in millions) (in millions) (in millions) Source: Facebook Inc. Prospectus. United States Securities and Exchange Commission, 17 May 2012. Web. 1 June 2012. http://www.sec.gov/Archives/edgar/data/1326801/000119312512240111/d287954d424b4.htm Itoc The value of total long-term liabilities that FB reported in 2011 was milion. Thus, using the firm's value, the derived equity value will be stock in 2012. Thus, the value of each stock, rounded to two decimal places, is According to the SEC filings, FB stock's IPO was priced at $38.00 per share. If Slim strictly follows the theoretical rules of investing, based on his analysis, what strategy would he recommend to investors interested in FB's stock as an asset in their short-term investment portfolio? Slim Perkins, a business journalist, is a recent hire at his firm. Since he joined the firm, he has been following Facebook Inc.'s (FB) initial public offering (IPO) and the stock's performance. His task is to estimate Facebook's fair market value, also referred to as "intrinsic" value, and compare this value with the current stock price, and recommend a buy, sell, or hold rating to investors. Slim pulls the company's consolidated financial statements to collect relevant data on the company's historical financial performance. He notices that the company assumes a 45% marginal tax rate after the IPO, and mentions that the company projects that user rates and revenue growth will decline over time. Slim starts his evaluation by calculating ratios of costs and expenses to revenues, interest expense to revenues, and others that will form the set of assumptions in his analysis which will be used to calculate free cash flows. Balance Sheet Income Statement Statement of Stockholder's tquity Statement of Cash Hows 2011 2010 2009 (in millions) (in millions) (in millions) Cash flows from operating activities Net income $1,000 $606 $229 Adjustments to reconcile net earnings to net cash from operating activities: Depreciation and amortization Loss on write-off of assets Share-based compensation Other adjustments Changes in assets and liabilities: Accounts receivable (174) (209) (112) Prepaid expenses and other current assets (31) (38) (30) Other assets (32) 17 (59) Accounts payable Platform partners payable Accrued expenses and other current liabilities Deferred revenues and deposits Other liabilities Net cash provided by operating activities Cash flows from investing activities Purchases of property and equipment $(606) $(293) $(33) Purchases of marketable securities Maturities of marketable securities Sales of marketable securities Investments in non-marketable equity securities (7) Acquisitions of business, net of cash acquired (3,025) Change in restricted cash and deposits 516 Net cash used in investing activities 113 (3) 12 78 1 27 (1) Cash flows from financing activities