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 2010 2011 2012 2013 2014

Cash Flow :1600 2600 3200 3400 2300

She asks you to please calculate the:

Geometric Total Return

-The Annualized Rate of Change

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

b)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