You are an analyst at a large firm. The Chief Financial Officer presents the following free cash flow data for ABC Corp (in millions of $).

Year Cash Flow 2010 1600 2011 2600 2012 3200 2013 3400 2014 2300

She asks you to please calculate the:

- Geometric Total Return - The Annualized Rate of Change

Then, the director asks you to make a 10 year cash flow forecast based upon the annualized rate of growth in cash flow.

Next, she asks you to calculate the NPV of the forecasted cash flows assuming an immediate investment cost of $19.8 billion.

To estimate the weighted average cost of capital, please use the following data points.

Market Value of Debt - $580,000,000 Market Value of Equity - $1,302,000,000 Current Yield to Maturity on Debt 5.1875% Tax Rate 35.2% Expected Return on Market 11.7% Current 10 year U.S. Treasury 4.3% Beta 2.41