ths CASE we are going to implement a share repurchase. We wil utize all three of the major financial statements. case start this assignment with the forecast for 2020C and 2021E set to the consensus revenues and EPS wo used in the last CASE Simple forecast. This means you should re-set your forecast! In CASE Simple Forecast, row 137, we found the consensus forecast for Microsoft (MSFT) Do you think Mcosoft can self finance this repurdase with is Free Cash Flows? Second, lets determine how mary thares Miciotoft wil repurchase with 510 bllion? Find the ciosinc pace of MSFT stock on 3/10/20, the day of the anosucement. Lets say 'the dota' on the day of the amouncement is: $160/ shane. We do nos want to forecast the repurchase price and instrad wll assume the cument close is the mpurchase proe. (This is what a wokine financial analyst on wallstret would da) Clacula the number of shanes the company is likely so repurchate as the current shane price: Hint: Cakplate how mary shares you can afford to buy with $10 billon if the ponce of a shane ik $160. 62,500,000 Nole leta implement the repurchase using SFAM. The Share ficpurchase model has been bult for you and starts in Row 221 on the Ealunce Sheet'sheet. The number in expressed in malons, so insen't 10 ' i you mean-10,000,000. This is a repurchase se the number is necaove! Given Microsofts $150 share price ind the $10 blion size of the repurchase, the number of shates inserted should be besweth-1 and-100. 2 Insert the $150 repurchase price in the yelow cell for 'Price per Share' on the 'Balance Sheer Shet in Air2z. 3. Venfy the amount repurchased is the $10 bition or $10,000,000,000 we intended to repurchase. It should say- 10,000 in the ine reading lisuls (Reparctasest of Equily below the prior two inserind fielts. \begin{tabular}{|c|c|c|c|} \hline \multicolumn{4}{|c|}{ How many thares are in the divned share count for 2020E and 2021C ? } \\ \hline & 20194 & 20206 & 2021E \\ \hline Share Count Prior to Repurtuse & 7.753 & 7,753 & 7.753 \\ \hline Shane Count Now, Afuer Repurchase & & & \\ \hline \end{tabular} Did the share count dedine froth 2019 to 2020 by the entine number you repurchased as enpressed in your answer in Bso? The andwer should be ina. The reanon why is trat mont comparies do not announce al of their repurchaserat the beginning of the year on lanuary 1. Therefore the entirety of the mis year mpunchase wal eot fulfy be vikble in the average diuted sharr count for the current year. - The kery is to undentand that the share court is a weighted averege foute for the entire fiscal year. The movertase also atfects the elolance Sheet. When we ifrpiemented the repurchase we did not simply refuce the share count on the income statement. We also paid for the repurchase, as evidenced on the talance sheet. To account for the transaction we would de bif fouly ta decrease) and credit Cash \& Marketable Secunties (a decrease). Hint If you cannot locate the richt place on the Balunce Sheet, wie the Control F function and searsh for 'Common Equiry'. Revised Equity 20 ono forecast followine the Aeparchaie Peeling back the onion a bit, you can see that the Common Equity on our Balance Sheet is forecast using a table in the Derivation of Actounts, Common Equity section. Take a look at the calculation of Equity in the forecast years and see how the repurchase has affected the balance. What happened to the Free Cash Flows for 20206 after you implemented the share repurchase? What happened to Excess Cash for 2020 E after you implemented the share repurchase? If the company finances the repurchase with fxcess Cash, what is the impact on the income Statement from the share repurchase? The last interest income eamed on the cash vilited to repurchase the shares B The cath (on the Balance Sheet) vied to repurchase the shares, $10 bilion C. The cash outtlow (on the Cash Flow Statement) required to repurchase the thares Why in't the forecast for Equify for 2020 e exactly 510 bllion lower than the 2019 fquty in our forecant? A Dividends B. Net income C. Dividends and Net Income REMEMBER, THESE ARE FORECASTS FOR THIS CASE AND NOT THE NEXT CASEI Please end this assigrment by restoring the figuires to the "base" case. ths CASE we are going to implement a share repurchase. We wil utize all three of the major financial statements. case start this assignment with the forecast for 2020C and 2021E set to the consensus revenues and EPS wo used in the last CASE Simple forecast. This means you should re-set your forecast! In CASE Simple Forecast, row 137, we found the consensus forecast for Microsoft (MSFT) Do you think Mcosoft can self finance this repurdase with is Free Cash Flows? Second, lets determine how mary thares Miciotoft wil repurchase with 510 bllion? Find the ciosinc pace of MSFT stock on 3/10/20, the day of the anosucement. Lets say 'the dota' on the day of the amouncement is: $160/ shane. We do nos want to forecast the repurchase price and instrad wll assume the cument close is the mpurchase proe. (This is what a wokine financial analyst on wallstret would da) Clacula the number of shanes the company is likely so repurchate as the current shane price: Hint: Cakplate how mary shares you can afford to buy with $10 billon if the ponce of a shane ik $160. 62,500,000 Nole leta implement the repurchase using SFAM. The Share ficpurchase model has been bult for you and starts in Row 221 on the Ealunce Sheet'sheet. The number in expressed in malons, so insen't 10 ' i you mean-10,000,000. This is a repurchase se the number is necaove! Given Microsofts $150 share price ind the $10 blion size of the repurchase, the number of shates inserted should be besweth-1 and-100. 2 Insert the $150 repurchase price in the yelow cell for 'Price per Share' on the 'Balance Sheer Shet in Air2z. 3. Venfy the amount repurchased is the $10 bition or $10,000,000,000 we intended to repurchase. It should say- 10,000 in the ine reading lisuls (Reparctasest of Equily below the prior two inserind fielts. \begin{tabular}{|c|c|c|c|} \hline \multicolumn{4}{|c|}{ How many thares are in the divned share count for 2020E and 2021C ? } \\ \hline & 20194 & 20206 & 2021E \\ \hline Share Count Prior to Repurtuse & 7.753 & 7,753 & 7.753 \\ \hline Shane Count Now, Afuer Repurchase & & & \\ \hline \end{tabular} Did the share count dedine froth 2019 to 2020 by the entine number you repurchased as enpressed in your answer in Bso? The andwer should be ina. The reanon why is trat mont comparies do not announce al of their repurchaserat the beginning of the year on lanuary 1. Therefore the entirety of the mis year mpunchase wal eot fulfy be vikble in the average diuted sharr count for the current year. - The kery is to undentand that the share court is a weighted averege foute for the entire fiscal year. The movertase also atfects the elolance Sheet. When we ifrpiemented the repurchase we did not simply refuce the share count on the income statement. We also paid for the repurchase, as evidenced on the talance sheet. To account for the transaction we would de bif fouly ta decrease) and credit Cash \& Marketable Secunties (a decrease). Hint If you cannot locate the richt place on the Balunce Sheet, wie the Control F function and searsh for 'Common Equiry'. Revised Equity 20 ono forecast followine the Aeparchaie Peeling back the onion a bit, you can see that the Common Equity on our Balance Sheet is forecast using a table in the Derivation of Actounts, Common Equity section. Take a look at the calculation of Equity in the forecast years and see how the repurchase has affected the balance. What happened to the Free Cash Flows for 20206 after you implemented the share repurchase? What happened to Excess Cash for 2020 E after you implemented the share repurchase? If the company finances the repurchase with fxcess Cash, what is the impact on the income Statement from the share repurchase? The last interest income eamed on the cash vilited to repurchase the shares B The cath (on the Balance Sheet) vied to repurchase the shares, $10 bilion C. The cash outtlow (on the Cash Flow Statement) required to repurchase the thares Why in't the forecast for Equify for 2020 e exactly 510 bllion lower than the 2019 fquty in our forecant? A Dividends B. Net income C. Dividends and Net Income REMEMBER, THESE ARE FORECASTS FOR THIS CASE AND NOT THE NEXT CASEI Please end this assigrment by restoring the figuires to the "base" case