RMIT Classification: Trusted Financial Statement Analysis_BAFI1070_Final individual Assignment (2021 Semester 2) (40 Marks) Please analyse each Case in a report in Word or PDF format (on the first page of word file, please clarify your course code, name and student ID). You could add a sperate Excel spreadsheet to support calculations in related questions if needed. Rubrics has already been provided to you on Canvas. Case 1(24 Marks): Wonderplayer develops video game products for consumers. In June 2012, a team of analysts issued a research report that valued Wonderplayer's stock at $11.6 per share, compared to the then current market price of $13. The research report's discounted cash flow valuation table is reproduced below. The 2012 figures are as reported by Wonderplayer, but the 2013 through 2020 figures are analysts' forecasts. Key assumptions include a weighted average cost of capital of 10% and a perpetual growth rate of 2%. All dollar amounts are in millions except share value. Analyst Forecast Actual 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total Revenues: 100 127.3 224.4 336.1 590.2 680.5 785.1 903.2 1010.3 EBITDA 5.8 8.5 14.9 30.1 58.3 68.2 86.5 113.1 134.4 Capital expenditures -0.2 -1.7 -1.9 -2.3 -2.9 -3 -3.1 -3.3 -3.5 Cash taxes 1.6 -2.1 10.8 -21.9 -25.6 -32.6 43.5 -52.1 Free cash flow 4,7 33.5 39.6 50.8 66.3 Discount factor: 0.909091 0.826446 0.751315 0.683013 0.620921 0.564474 0.513158 0.466507 Present value 4.272727 7.024793 12.77235 22 88095 24.58848 28.67528 34.02238 36.76078 Present value beyond 2020 468.7 Present value 2013-2020 170.9977 639.6977 Less net deb 54.1 Equity value 585.5977 Shares ourstanding 50.35 Share value 11.63054 Required: 1, Comment on how the analyst of Wonderplayer calculate free cash flow compares with how the professional CFA might compute free cash flow directly from the company's financial statements. (4 marks) 2, What role does the 10% WACC play in the discounted cash flow valuation analysis? How about the role of WACC in the abnormal earnings valuation analysis? (2 mark) 3, Explain in detail to someone unfamiliar with present value calculations about how the Present value 2013-2020(i.e. $170.9977) is computed. (4 marks) 4, Explain in detail how the figure $468.7 for Present value beyond 2020 is computed. (5 marks) 5, Why does the analyst team subtract an amount for net debt in arriving at Equity value? (Note: The term net debt is defined for spreadsheet purposes as financial liabilities (e.g., loans) minus any financial assets (e.g., money market investments)) (2 marks) 6, What share value estimate would the Wonderplayer have calculated if they had used an abnormal earnings value approach rather than a discounted cash flow approach and had developed forecasts