questions are in second image A client wants you to explain how to determine her firm's value You are provided the information of her company as below Note all units in millions Income Statements Actual Projected Projected Projected Projected 2020 2021 2022 2023 2024 Sales 4,512 44 4,873 44 5,165 84 5,475 80 5,804 34 Costs of Goods Sold 2,797 71 3,021 53 3,202 82 3,394 99 3,598 69 Sales, General and Administrative 902 49 974 69 1,033 17 1,095 16 1,160 87 Depreciation 225 62 243 67 258 29 273 80 290 22 Operating Profit 586 62 633 55 671 56 711 85 754 56 Interest on original debt 80 00 80 00 80 00 80 00 80 00 Interest Expense on new debt 25 73 34 35 42 84 50 18 57 95 Interest expense 105 73 114 35 122 84 130 18 137 95 Earnings Before Taxes 480 89 519 20 548 72 581 67 616 61 Taxes 192 36 207,68 219 49 232 67 246 65 Net Income 288 53 311 52 329 23 349 00 369 96 Dividends 104 89 135 10 191 43 202 90 215 05 Additions to retained earnings 183 64 176 41 137 80 146 11 154 91 Balance Sheets Actual Projected Projected Projected Projected 2021 2022 2023 2024 Cash 45 12 48 73 51 66 54 76 58 04 Inventory 631 74 682 28 723 22 766 61 812 61 Accounts receivable 1,128 11 1,218,36 1,291,46 1,368 95 1,451 09 Total current assets 1,804 97 1,949 37 2,066 34 2,190 32 2,321 74 Gross PPE 3,443 32 3,867,49 4,271 98 4 700 75 5,155 24 Accumulated depreciation 1,187 09 1,430 77 1,689 06 1,962,85 2,253,07 Net PPE 2,256 23 2,436 72 2,582 92 2,737 90 2,902 17 Total assets 4 061 20 4 386 09 4,649 26 4 928 22 5 223 91 Accounts payable 451 24 487 34 516 58 547 58 580 43 Accrued expenses 225,62 243 67 258 29 273 79 290 22 Short term debt 381 71 476 04 557 55 643 90 735 4 Total current liabilities 1,058 57 1,207 05 1,332 42 1,465 27 1,606 05 Long term debt 1,000 00 1,000 00 1,000 00 1,000 00 1,000 00 Total liabilities 2,058 57 2,207 05 2,332 42 2,465 27 2,606 05 Common stock (100 million shares) 600 00 600 00 600 00 600 00 600 00 Retained earnings 1,402 63 1,579 04 1 716 84 1,862 95 2017 86 Total common equity 2,002 63 2,179 04 2,316 84 2 462 95 2,617 86 Total liabilities and equity 4 061 20 4 386 09 4 649 26 4 928 22 5 223 91 2020 5 223 97 $ 1,000 00 1,000 30 35 950 00 Required return on bond (yield) Par Value Number of bonds outstanding, in thousands Number of payments remaining Periodic coupon (semi annual) Bond price now Aggregate market value of bonds, Smillions Required return on stock Beta Risk free rate Market risk premium Target weight debt Target weight equity Tax rate Number of shares outstanding, in millions $ 950 00 1 2 4 0 6 0 30 70 40 100 Exam Question Design TWO valuation templates (see Assignment 3) to show your client the valuation process One is based on Free Cash Flow framework, another one is based on the Economic Profit framework Your valuation templates will demonstrate for your client the equivalence between the free cash flow model and the economic profit model A client wants you to explain how to determine her firm's value You are provided the information of her company as below Note all units in millions Income Statements Actual Projected Projected Projected Projected 2020 2021 2022 2023 2024 Sales 4,512 44 4,873 44 5,165 84 5,475 80 5,804 34 Costs of Goods Sold 2,797 71 3,021 53 3,202 82 3,394 99 3,598 69 Sales, General and Administrative 902 49 974 69 1,033 17 1,095 16 1,160 87 Depreciation 225 62 243 67 258 29 273 80 290 22 Operating Profit 586 62 633 55 671 56 711 85 754 56 Interest on original debt 80 00 80 00 80 00 80 00 80 00 Interest Expense on new debt 25 73 34 35 42 84 50 18 57 95 Interest expense 105 73 114 35 122 84 130 18 137 95 Earnings Before Taxes 480 89 519 20 548 72 581 67 616 61 Taxes 192 36 207,68 219 49 232 67 246 65 Net Income 288 53 311 52 329 23 349 00 369 96 Dividends 104 89 135 10 191 43 202 90 215 05 Additions to retained earnings 183 64 176 41 137 80 146 11 154 91 Balance Sheets Actual Projected Projected Projected Projected 2021 2022 2023 2024 Cash 45 12 48 73 51 66 54 76 58 04 Inventory 631 74 682 28 723 22 766 61 812 61 Accounts receivable 1,128 11 1,218,36 1,291,46 1,368 95 1,451 09 Total current assets 1,804 97 1,949 37 2,066 34 2,190 32 2,321 74 Gross PPE 3,443 32 3,867,49 4,271 98 4 700 75 5,155 24 Accumulated depreciation 1,187 09 1,430 77 1,689 06 1,962,85 2,253,07 Net PPE 2,256 23 2,436 72 2,582 92 2,737 90 2,902 17 Total assets 4 061 20 4 386 09 4,649 26 4 928 22 5 223 91 Accounts payable 451 24 487 34 516 58 547 58 580 43 Accrued expenses 225,62 243 67 258 29 273 79 290 22 Short term debt 381 71 476 04 557 55 643 90 735 4 Total current liabilities 1,058 57 1,207 05 1,332 42 1,465 27 1,606 05 Long term debt 1,000 00 1,000 00 1,000 00 1,000 00 1,000 00 Total liabilities 2,058 57 2,207 05 2,332 42 2,465 27 2,606 05 Common stock (100 million shares) 600 00 600 00 600 00 600 00 600 00 Retained earnings 1,402 63 1,579 04 1 716 84 1,862 95 2017 86 Total common equity 2,002 63 2,179 04 2,316 84 2 462 95 2,617 86 Total liabilities and equity 4 061 20 4 386 09 4 649 26 4 928 22 5 223 91 2020 5 223 97 $ 1,000 00 1,000 30 35 950 00 Required return on bond (yield) Par Value Number of bonds outstanding, in thousands Number of payments remaining Periodic coupon (semi annual) Bond price now Aggregate market value of bonds, Smillions Required return on stock Beta Risk free rate Market risk premium Target weight debt Target weight equity Tax rate Number of shares outstanding, in millions $ 950 00 1 2 4 0 6 0 30 70 40 100 Exam Question Design TWO valuation templates (see Assignment 3) to show your client the valuation process One is based on Free Cash Flow framework, another one is based on the Economic Profit framework Your valuation templates will demonstrate for your client the equivalence between the free cash flow model and the economic profit model

Question

questions are in second image A client wants you to explain how to determine her firm's value  You are provided the information of her company as below  Note  all units in millions Income Statements Actual Projected Projected Projected Projected 2020 2021 2022 2023 2024 Sales 4,512 44 4,873 44 5,165 84 5,475 80 5,804 34 Costs of Goods Sold 2,797 71 3,021 53 3,202 82 3,394 99 3,598 69 Sales, General and Administrative 902 49 974 69 1,033 17 1,095 16 1,160 87 Depreciation 225 62 243 67 258 29 273 80 290 22 Operating Profit 586 62 633 55 671 56 711 85 754 56 Interest on original debt 80 00 80 00 80 00 80 00 80 00 Interest Expense on new debt 25 73 34 35 42 84 50 18 57 95 Interest expense 105 73 114 35 122 84 130 18 137 95 Earnings Before Taxes 480 89 519 20 548 72 581 67 616 61 Taxes 192 36 207,68 219 49 232 67 246 65 Net Income 288 53 311 52 329 23 349 00 369 96 Dividends 104 89 135 10 191 43 202 90 215 05 Additions to retained earnings 183 64 176 41 137 80 146 11 154 91 Balance Sheets Actual Projected Projected Projected Projected 2021 2022 2023 2024 Cash 45 12 48 73 51 66 54 76 58 04 Inventory 631 74 682 28 723 22 766 61 812 61 Accounts receivable 1,128 11 1,218,36 1,291,46 1,368 95 1,451 09 Total current assets 1,804 97 1,949 37 2,066 34 2,190 32 2,321 74 Gross PPE 3,443 32 3,867,49 4,271 98 4 700 75 5,155 24 Accumulated depreciation 1,187 09 1,430 77 1,689 06 1,962,85 2,253,07 Net PPE 2,256 23 2,436 72 2,582 92 2,737 90 2,902 17 Total assets 4 061 20 4 386 09 4,649 26 4 928 22 5 223 91 Accounts payable 451 24 487 34 516 58 547 58 580 43 Accrued expenses 225,62 243 67 258 29 273 79 290 22 Short term debt 381 71 476 04 557 55 643 90 735 4 Total current liabilities 1,058 57 1,207 05 1,332 42 1,465 27 1,606 05 Long term debt 1,000 00 1,000 00 1,000 00 1,000 00 1,000 00 Total liabilities 2,058 57 2,207 05 2,332 42 2,465 27 2,606 05 Common stock (100 million shares) 600 00 600 00 600 00 600 00 600 00 Retained earnings 1,402 63 1,579 04 1 716 84 1,862 95 2017 86 Total common equity 2,002 63 2,179 04 2,316 84 2 462 95 2,617 86 Total liabilities and equity 4 061 20 4 386 09 4 649 26 4 928 22 5 223 91 2020 5 223 97 $ 1,000 00 1,000 30 35 950 00 Required return on bond (yield) Par Value Number of bonds outstanding, in thousands Number of payments remaining Periodic coupon (semi annual) Bond price now Aggregate market value of bonds, Smillions Required return on stock Beta Risk free rate Market risk premium Target weight debt Target weight equity Tax rate Number of shares outstanding, in millions $ 950 00 1 2 4 0  6 0  30  70  40  100 Exam Question  Design TWO valuation templates (see Assignment  3) to show your client the valuation process  One is based on Free Cash Flow framework, another one is based on the Economic Profit framework  Your valuation templates will demonstrate for your client the equivalence between the free cash flow model and the economic profit model  A client wants you to explain how to determine her firm's value  You are provided the information of her company as below  Note  all units in millions Income Statements Actual Projected Projected Projected Projected 2020 2021 2022 2023 2024 Sales 4,512 44 4,873 44 5,165 84 5,475 80 5,804 34 Costs of Goods Sold 2,797 71 3,021 53 3,202 82 3,394 99 3,598 69 Sales, General and Administrative 902 49 974 69 1,033 17 1,095 16 1,160 87 Depreciation 225 62 243 67 258 29 273 80 290 22 Operating Profit 586 62 633 55 671 56 711 85 754 56 Interest on original debt 80 00 80 00 80 00 80 00 80 00 Interest Expense on new debt 25 73 34 35 42 84 50 18 57 95 Interest expense 105 73 114 35 122 84 130 18 137 95 Earnings Before Taxes 480 89 519 20 548 72 581 67 616 61 Taxes 192 36 207,68 219 49 232 67 246 65 Net Income 288 53 311 52 329 23 349 00 369 96 Dividends 104 89 135 10 191 43 202 90 215 05 Additions to retained earnings 183 64 176 41 137 80 146 11 154 91 Balance Sheets Actual Projected Projected Projected Projected 2021 2022 2023 2024 Cash 45 12 48 73 51 66 54 76 58 04 Inventory 631 74 682 28 723 22 766 61 812 61 Accounts receivable 1,128 11 1,218,36 1,291,46 1,368 95 1,451 09 Total current assets 1,804 97 1,949 37 2,066 34 2,190 32 2,321 74 Gross PPE 3,443 32 3,867,49 4,271 98 4 700 75 5,155 24 Accumulated depreciation 1,187 09 1,430 77 1,689 06 1,962,85 2,253,07 Net PPE 2,256 23 2,436 72 2,582 92 2,737 90 2,902 17 Total assets 4 061 20 4 386 09 4,649 26 4 928 22 5 223 91 Accounts payable 451 24 487 34 516 58 547 58 580 43 Accrued expenses 225,62 243 67 258 29 273 79 290 22 Short term debt 381 71 476 04 557 55 643 90 735 4 Total current liabilities 1,058 57 1,207 05 1,332 42 1,465 27 1,606 05 Long term debt 1,000 00 1,000 00 1,000 00 1,000 00 1,000 00 Total liabilities 2,058 57 2,207 05 2,332 42 2,465 27 2,606 05 Common stock (100 million shares) 600 00 600 00 600 00 600 00 600 00 Retained earnings 1,402 63 1,579 04 1 716 84 1,862 95 2017 86 Total common equity 2,002 63 2,179 04 2,316 84 2 462 95 2,617 86 Total liabilities and equity 4 061 20 4 386 09 4 649 26 4 928 22 5 223 91 2020 5 223 97 $ 1,000 00 1,000 30 35 950 00 Required return on bond (yield) Par Value Number of bonds outstanding, in thousands Number of payments remaining Periodic coupon (semi annual) Bond price now Aggregate market value of bonds, Smillions Required return on stock Beta Risk free rate Market risk premium Target weight debt Target weight equity Tax rate Number of shares outstanding, in millions $ 950 00 1 2 4 0  6 0  30  70  40  100 Exam Question  Design TWO valuation templates (see Assignment  3) to show your client the valuation process  One is based on Free Cash Flow framework, another one is based on the Economic Profit framework  Your valuation templates will demonstrate for your client the equivalence between the free cash flow model and the economic profit model

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questions are in second image A client wants you to explain how to determine her firm's value. You are provided the information of her company

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