Using the data provided, complete the template on the spreadsheet (Fill in all blue-shaded areas). Specifically, you need to:

a.Forecast FCF for 2017 assuming that 2016 free cash flow grows at a constant annual rate of 5.5%.

b. Use the corporate valuation model to determine the intrinsic value of the companys stock

ACME Industries Income Statement ($ millions) 2015 2016 Sales 3,729.60 4,139.86 Cost of goods sold 2,312.35 2,566.71 Gross Profit 1,417.25 1,573.15 Operating expenses 745.92 827.97 Depreciation 186.48 206.99 Earnings before interest and taxes 484.85 538.19 Interest expense 88.05 96.49 Earnings before taxes 396.80 441.70 Taxes 158.72 176.68 Net income 238.08 265.02 Balance Sheet 2015 2016 Cash 17.30 21.40 Short-term investments 20.00 20.00 Inventory 522.14 579.58 Accounts receivable 932.40 1,034.96 Total current assets 1,491.84 1,655.94 Gross property, plant, and equipment 2,619.28 3,031.40 less: accumulated depreciation 754.48 961.47 Net property, plant, and equipment 1,864.80 2,069.93 Total assets 3,356.64 3,725.87 Accounts payable 372.96 413.99 Accrued expenses 186.48 206.99 Notes payable 183.19 285.90 Total current liabilities 742.63 906.88 Long-term debt 1,000.00 1,000.00 Total liabilities 1,742.63 1,906.88 Common stock 500.00 600.00 Retained earnings 1,114.01 1,218.99 Total common equity 1,614.01 1,818.99 Total liabilities and equity 3,356.64 3,725.87 Other Data: 2015 2016 WACC 6.0% 6.0% Tax Rate 40.0% 40.0% Stock Price 46.72 47.53 Shares of Common Stock Outstanding (millions) 100 100 Free Cash Flow (current year) 15.22 Constant Growth of FCF: 2016 2017 Growth Rate 5.5% Forecast FCF (2017) Value of Operations NOA Value of Firm Debt Preferred Stock Value of Common Equity Intrinsic Value Non-constant Growth of FCF: 2016 2017 2018 2019 Growth rate 50% 30% 15% Forecast FCF Horizon Value Value of Operations NOA Value of Firm Debt Preferred Stock Value of Common Equity Intrinsic Value