You have recently been hired by Apple. to work in its finance department. Assuming that it is currently the end of fiscal year 2019 for Apple.

1. Compute the Free Cash flow (FCF) for year 2019 based on the financial statements provided.

• What is the net operating profit after taxes (NOPAT) for 2019?
• What are the amounts of net operating working capital for 2018 and 2019?
• What are the amounts of total net operating capital for both years?
• What is the free cash flow for 2019?

2. Your manager asks you to compute the intrinsic price per share for Apple. Your boss projects the following free cash flows for the next 3 years, after which FCF is expected to grow at a constant 6% rate. Tigers weighted average cost of capital (WACC) is 12%. Suppose Apple has $20 million in marketable securities, $1000 million in debt, and 40 million shares of stock.

• What is Apple horizon value of operations?
• What is the intrinsic price per share?