Problem 2 Arheregs- Btsel hnbe SA In November 2008, the Belgian InBev S.A. completed the acquisition of US-based Anheuser-Busch. The brewer acquired Anheuser-Busch for close to 40 billion, of which it classified approximately 25 billion as goodwill. At. the end of the fiscal year ending on December 31, 2008, Anheuser-Busch InBev's (AB InBev) net assets amounted to 61,357 million, consisting of 64,183 million in non-current assets and 2,826 million in working capital. The company's book value of equily amounted to 16,126 million. Early May, 2009, when AB Inbev's 1,593 million common shares trade at about f24 per share, an analyst produces the following forecasts for the company and issues an "overweight" (buy) recommendation. 1. The analyst estimates that AB InBev's weighted average cost of capital is 9 percent and assumes that the free eash .low to debe and equity grows indefinitely at a rate of 1 percent after 2018. Show that under these assumptions, the equily value per share estimate exceeds AB InBev's share price. 2 Calculate AB InBev's expected abnotmal NOPATs between 2009 and 2018 based on the above irformation. How does the implied trend in abisormal NOPAT compare with the general trends in the economy? 3 Estimate AB InBev's equity value using the abnormal NOPAT model (under the assumption that the WACC is 9 percent and the terminal growth rate is 1 percent). Why do the discounted cash flow model and the abnotmal NOPAT model yield different outcomes? \& What adjustments to the forecasts are needed to make the two valuation models consistent? Problem 2 Arheregs- Btsel hnbe SA In November 2008, the Belgian InBev S.A. completed the acquisition of US-based Anheuser-Busch. The brewer acquired Anheuser-Busch for close to 40 billion, of which it classified approximately 25 billion as goodwill. At. the end of the fiscal year ending on December 31, 2008, Anheuser-Busch InBev's (AB InBev) net assets amounted to 61,357 million, consisting of 64,183 million in non-current assets and 2,826 million in working capital. The company's book value of equily amounted to 16,126 million. Early May, 2009, when AB Inbev's 1,593 million common shares trade at about f24 per share, an analyst produces the following forecasts for the company and issues an "overweight" (buy) recommendation. 1. The analyst estimates that AB InBev's weighted average cost of capital is 9 percent and assumes that the free eash .low to debe and equity grows indefinitely at a rate of 1 percent after 2018. Show that under these assumptions, the equily value per share estimate exceeds AB InBev's share price. 2 Calculate AB InBev's expected abnotmal NOPATs between 2009 and 2018 based on the above irformation. How does the implied trend in abisormal NOPAT compare with the general trends in the economy? 3 Estimate AB InBev's equity value using the abnormal NOPAT model (under the assumption that the WACC is 9 percent and the terminal growth rate is 1 percent). Why do the discounted cash flow model and the abnotmal NOPAT model yield different outcomes? \& What adjustments to the forecasts are needed to make the two valuation models consistent