Show Full Process/Details with Formula on Excel.

Calculate (1) Horizon Value (HV) or Terminal Value (TV) and (2) Value of Operations

2019 Company Financial Statements (Mllions, Except for Per Share Data) INCOME STATEMENTS 2018 Net sales 4,760 5,000 COGS (excl. depr.) 3.560 3.800 Depreciation 170 200 Other operating expenses 480 500 EBIT 1550 500 Interest expense 100 120 Pre-tax earnings 450 380 Taxes (40%) 180 152 NI before pref. div. (270 228 Preferred div. 8 8 Net income 262 220 BALANCE SHEETS 2019 Assets Cash ST Investments Accounts receivable Inventories Total CA Net PP&E Total assets 60 40 380 820 1,300 1,700 3,000 2018 50 0 500 1,000 1,550 2.000 3,550 Liabilities and quity Accounts payable Accruals Other Data Common dividends Addition to RE Tax rate Shares of common stock Earnings per share Dividends per share Price per share $48 $214 40% 50 $5.24 $0.96 $40.00 Notes payable Total CL $50 Long-term bonds $170 Total liabilities 40% Preferred stock 50 Common stock $4.40 Retained earnings $1.00 Total common equity $27.00 Total liabs. & equity 190 280 130 600 1,000 1,600 100 500 800 1,300 3,000 200 300 280 780 1,200 1,980 100 500 970 1,470 3,550 Actual Forecast 2019 2020 5500 2021 2022 6355.8 2023 2024 6673.597007.27 5000 5940 50 500 1000 55 550 1100 2200 220 330 59.4 594 1188 2376 237.6 356.4 63.558 635.58 1271.16 2542.32 254.232 381.348 66.74 667.36 1334.72 2669.44 266.94 400.42 70.07 700.73 1401.45 2802.91 280.29 420.44 2000 200 300 Sales Revenues Net sales Operating Assets and Operating Liabilities Cash Accounts receivable Inventories Net PP&E Accounts payable Accruals Operating Income COGS (excl. depr.) Depreciation Other operating expenses EBIT Net operating profit after taxes Free Cash Flows Net operating working capital Total operating capital FCF = NOPAT - A op capital 3800 200 500 500 300 4180 220 550 550 330 4514.4 237.6 594 594 356,4 4830.408 254.232 635.58 635.58 5071.93 266.94 667.36 667.36 400.42 5325.52 280.29 700.73 700.73 420.44 381.348 1247.4 1050 3050 -260 1155 3355 3623.4 88 1334.718 3877.038 127.71 1401.45 4070.89 206.56 1471.53 4274.43 216.89 Target WACC 10.97% 10.97% 10.97% 10.97% 10.97% Growth rates in FCF 252.00% 45.12% 61.74% 5.00%