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The corporate valuation model, the price-to-earnings (P/E) multiple approach, and the economic value-added (EVA) approach are some examples of valuation techniques. The corporate valuation model

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The corporate valuation model, the price-to-earnings (P/E) multiple approach, and the economic value-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. Petroxy Oil Co. has an expected net operating profit after taxes, EBIT(1 T), of $9,300 million in the coming year. In addition, the firm is expected to have net capital expenditures of $1,395 million, and net operating working capital (NOWC) is expected to increase by $25 million. How much free cash flow (FCF) is Petroxy Oil Co. expected to generate over the next year? O $7,880 million O $210,629 milliorn O $10,670 million O $7,930 million Petroxy Oil Co.'s FCFs are expected to grow at a constant rate of 3.18% per year in the future. The market value of Petroxy Oil Co.'s outstanding debt is $55,755 million, and preferred stocks' value is $30,975 million. Petroxy Oil Co. has 375 million shares of common stock outstanding, and its weighted average cost of capital (WACC) equals 9.54%. Using the preceding information and the FCF you calculated in the previous question, calculate the appropriate values in this table. Term Value (Millions) Total firm value Value of common equity Intrinsic value per share

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