please answer correctly and show workings. Thank you

(f) Estimate the value of a share of Cisco common stock as of July 30, 2016 using the discounted

cash flow (DCF) model and sales, NOPAT and NOA forecast in (e)

(g) If Cisco's top management were optimistic about CISCO's market growth opportunities and

revised their sales growth rates up by 5%, please forecast Cisco's sales, NOPAT, and NOA for

years 2017 through 2020 and the terminal period using the following assumptions:

Sales growth 2017

7%

Sales growth 2018-2020

8%

Terminal growth

1%

Net operating profit margin

2016 rate rounded to three decimal places

Net operating asset turnover

2016 rate rounded to three decimal places

(h) Estimate the value of a share of Cisco common stock as of July 30, 2016 using the

discounted cash flow (DCF) model and the forecast in (g); Note, still assume a discount rati

(WACC) of 10%, common shares outstanding of 5,029 million, and net nonoperating oblig

(NNO) of $(37,113) million.

(i) Cisco stock closed at $31.47 on September 8, 2016, the date the Form 10-K was filed

SEC. How does your DCF valuation estimates compare with this closing price? What do

believe are some reasons for the difference? What investment decision is suggested from

results?

Cisco Systems; Inc. is a multinational information technology company headquartered in San

Jose, California, that produces and sells networking hardware, telecommunications equipment and

other high-technology services. Cisco Systems was founded in December 1984 by Leonard Bosack

and Sandy Lerner, two Stanford University computer scientists, who pioneered the concept of a

local area network (LAN). In 1990, Cisco Systems went public with a market capitalization of

$224 million. By 2000, Cisco had become the most valuable company in the world with a more

than $500 billion market capitalization. The stock was initially listed on the NASDAQ in 1990,

and then was added to the Dow Jones Industrial Average on June 8, 2009. Cisco is currently

included in the S&P 500 Index, the Russell 1000 Index, NASDAQ-100 Index and the Russell 1000

Growth Stock Index.

As Figure 1 shows, the stock price of Cisco Systems peaked in 1999-2000 before the burst of

internet bubble. However, its stock price has been fluctuating in the range of $10-$30 since 2001.

Cisco Systems Inc.

Consolidated Statements of Income

/ears Ended December (S millions)

July 30, 2016. July 25,2015

Revenue

Product $37.254. 37,750

Service. 11.993. 11,411

Total revenue49,247. 49,161

Cost of sales.

Product. 14,161. 15,377

Service. 4,126. 4103

Total cost of sales 18,287. 19,480

Gross margin. 30,960. 29, 681

Operating expenses

Research and development 6,296. 6207

Sales and marketing. 9,619. 9,821

General and administrative. 1,814. 2,040

Amortization of purchased intangible assets. 303. 359

Restructuring and other charges. 268. 484

Total operating expenses. 18,300. 18,911

Operating income. 12,660. 10,770

Interest income. 1,005. 769

Interest expense. (679). (566)

Other income (loss), net (69). 228

Interest and other income (loss), net. 260. 431

Income before provision for income taxes 12,920. 11,201

Provision for income taxes. 2,181. 2,220

Net income. 10,739. 8,981

Balance sheet

In millions, except per value. July 30, 2016. July 25,2015

Assets

Current assets.

Cash and cash equivalents. 7,631. 6,877

Investments. 58,125. 53,539

Accounts receivable, net of allowance for doubtful accounts of $249

at July 30, 2016 and $302 at July 25, 2015 - 5847. 5344

Inventories. 1,217. 1627

Financing receivables, net. 4,272. 4491

Other current assets. 1627. 1490

Total current assets. 78,719. 73,368

Property and equipment, net. 3506. 3332

Financing receivables, net. 4158 3858

Goodwill. 26,625. 24469

Purchased intangible assets, net. 2501. 2376

Deferred tax assets. 4299. 4454

Other assets. 1844. 1516

Total assets. 121652. 113373

Liabilities

Current liabilities

Short-term debt. 4160 3897

Accounts payable. 1056. 1104

Income taxes payable. 517. 62

Accrued compensation. 2951. 3049

Deferred revenue. 10,155. 9824

Other current liabilities. 6072. 5476

Total current liabilities. 24911. 23412

Long-term debt. 24483. 21457

Income taxes payable. 925. 1876

Deferred revenue. 6317. 5359

Other long-term liabilities. 1431. 1562

Total liabilities. 58067. 53,666

Consolidated balance sheets

In millions, except par value. July 30,2016July25,2015

Cisco shareholders' equity

Preferred stock, no par value: 5 shaes authorized; none issued and

outstanding

Common stock and additional paid-in capital, $0.001 par value:

20,000 shares authorized; 5,029 and 5,085 shares issued and. 44516. 43592

outstanding at July 30, 2016 and July 25, 2015, respectively.

Retained earnings. 19,396. 16,045

Accumulated other comprehensive income (loss) (326) 61

Total Cisco shareholders' equity. 63586. 59,698

Noncontrolling interests. (1). 9

Total equity. 63585. 59707

Total liabilities and equity. 121652. 113373