You have been asked to value the shares of CBS Corp. and have decided to use a

FCF to Equity valuation approach. You have been provided with data on expected

operating cash flows and capital expenditures below:

After $2022,$ FCFE is expected to grow at a constant rate of $6\%$ forever. The

required rate of return on the stock is $12\%$ and there are $100$ shares outstanding.

Q$1.$ What is the total value of the firm's equity?

Q$2.$ What is the per share value?

Q$3.$ What is sensitivity analysis?

Q$4.$ Why it is important to perform a sensitivity analysis?

Q$5.$ Using sensitivity analysis, which of the following variables has the greater

effect on the valuation:

a$)$ Changes in the long$-$term growth rate assumption.

b$)$ Changes in the discount rate.

$(*)$ B&D