Options Range of Exercise Prices Options outstanding Number of Weighted-Average Shares as of 28 Remaining Contractual Life Jan-17 (in years) Weighted Average Exercise Price Per Share Options exercisable Number of Shares as of 28- Jan-17 Weighted Average Exercise Price Per Share 799,993 6.51 19.70 370,193 20.73 511.77- $23.18 $23.03 780,655 7.39 24.96 360,905 25.15 $29.52 530.18 $30.18 3,366,560 8.53 30.18 n/a 1,850,165 6.71 39.74 738,732 38.61 $35.10 $41.27 $41.67 $46.41 726,663 5.92 42.32 382,590 42.32 Question: Calculate diluted shares. Assume all options and restricted stock would automatically vest upon a change of control, that in the money options would be exercised, and that option proceeds are used to buy back common stock at the current stock price 111.699.691 112.484,460 115,898.190 116.394 369 116.396 397 Question 2012 An analyst is building a DCF on January 1, 2017 and has calculated unlevered free cash flows as follows: 2017 2018 2019 2020 2021 2022 Unlevered free cash flows 100.0 105.0 110.3 115.8 121.6 127.6 9 Growth 5.09 5.0% 5.0% 5.04 5.0% WACC 10.04 Perpetuity growth rate 3.09 Net debt $700 (51.050 in gross debt less $350 in cash) After checking her work, she realizes that she did not reflect the following information in her calculations Deferred tax liabilities (DTLS) are $120 million on the balance sheet as of the valuation date and have arisen because the company uses straight-line depreciation under GAAP but accelerated depreciation for tax purposes. The DTLs are expected to grow by $20 million in each year through 2022, at which point it is assumed that they will stop growing and stay on the books Indefinitely (the DTL will never reverse). Question: Which of the statements below is most accurate? Use whole numbers (l.e. 1 year exactly equals 1 period when calculating returns and discounting), The analyst should adjust UECF Up by $20 in each year through 2022. Terminal value should be recalculated to 1,877.5 million. Net debt shouldn't be modified The analyst should adjust UFCF down by $20 in each year through 2022. Terminal value and net debt do not need to be modified The analyst should adjust UFCF down by $20 in each year through 2022. Terminal value (undiscounted) should be recalculated to 2.172.2 million. Net debe shouldn't be modified The analyst should adjust UECHUP by 520 nach year through 2022. Terminal value and net debt do not need to be modified The analyst should adjust ur down by 202022. Terminal loe should be recalculated to 2 min. Net debt should be related to the nodion of theorettu 1220 milioni Options Range of Exercise Prices Options outstanding Number of Weighted-Average Shares as of 28 Remaining Contractual Life Jan-17 (in years) Weighted Average Exercise Price Per Share Options exercisable Number of Shares as of 28- Jan-17 Weighted Average Exercise Price Per Share 799,993 6.51 19.70 370,193 20.73 511.77- $23.18 $23.03 780,655 7.39 24.96 360,905 25.15 $29.52 530.18 $30.18 3,366,560 8.53 30.18 n/a 1,850,165 6.71 39.74 738,732 38.61 $35.10 $41.27 $41.67 $46.41 726,663 5.92 42.32 382,590 42.32 Question: Calculate diluted shares. Assume all options and restricted stock would automatically vest upon a change of control, that in the money options would be exercised, and that option proceeds are used to buy back common stock at the current stock price 111.699.691 112.484,460 115,898.190 116.394 369 116.396 397 Question 2012 An analyst is building a DCF on January 1, 2017 and has calculated unlevered free cash flows as follows: 2017 2018 2019 2020 2021 2022 Unlevered free cash flows 100.0 105.0 110.3 115.8 121.6 127.6 9 Growth 5.09 5.0% 5.0% 5.04 5.0% WACC 10.04 Perpetuity growth rate 3.09 Net debt $700 (51.050 in gross debt less $350 in cash) After checking her work, she realizes that she did not reflect the following information in her calculations Deferred tax liabilities (DTLS) are $120 million on the balance sheet as of the valuation date and have arisen because the company uses straight-line depreciation under GAAP but accelerated depreciation for tax purposes. The DTLs are expected to grow by $20 million in each year through 2022, at which point it is assumed that they will stop growing and stay on the books Indefinitely (the DTL will never reverse). Question: Which of the statements below is most accurate? Use whole numbers (l.e. 1 year exactly equals 1 period when calculating returns and discounting), The analyst should adjust UECF Up by $20 in each year through 2022. Terminal value should be recalculated to 1,877.5 million. Net debt shouldn't be modified The analyst should adjust UFCF down by $20 in each year through 2022. Terminal value and net debt do not need to be modified The analyst should adjust UFCF down by $20 in each year through 2022. Terminal value (undiscounted) should be recalculated to 2.172.2 million. Net debe shouldn't be modified The analyst should adjust UECHUP by 520 nach year through 2022. Terminal value and net debt do not need to be modified The analyst should adjust ur down by 202022. Terminal loe should be recalculated to 2 min. Net debt should be related to the nodion of theorettu 1220 milioni