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The corporate valuation model, the price-to-earnings (P/E) multiple approach, and the economievalue-added (EVA) approach are some examples of valuation techniques. The corporate valuation model is
The corporate valuation model, the price-to-earnings (P/E) multiple approach, and the economievalue-added (EVA) approach are some examples of valuation techniques. The corporate valuation model is similar to the dividend-based valuation that you've done in previous problems, but it focuses on a firm's free cash flows (FCFs) instead of its dividends. Some firms don't pay dividends, or their dividends are difficult to forecast. For that reason, some analysts use the corporate valuation model. St. Margaret Beer Co. has an expected net operating profit after taxes, EBIT(1 - T), of $14,000 million in the coming year. In addition, the firm is expected to have net capital expenditures of $2,100 million, and net operating working capital (NOWC) is expected to increase by $30 million. How much free cash flow (FCF) is St. Margaret Beer Co. expected to generate over the next year? $16,070 million $11,870 million $11,930 million $410,142 million St. Margaret Beer Co.'s FCFs are expected to grow at a constant rate of 2.46% per year in the future. The market value of St. Margaret Beer Co.'s outstanding debt is $108,567 million, and preferred stocks' value is $60,315 million. St. Margaret Beer Co. has 450 million shares of common stock outstanding, and its weighted average cost of capital (WACC) equals 7.38%. Using the preceding information and the FCF you calculated in the previous question, calculate the appropriate values in this table
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