Question

**Computing Free Cash Flows to the Firm
(FCFF)**

Use the following data to compute free cash flows to the firm for Intel Corporation for 2016 through the terminal period.

Reported | Horizon Period | Terminal | |||||
---|---|---|---|---|---|---|---|

$ millions | 2015 | 2016 | 2017 | 2018 | 2019 | Period | |

Sales | $ 55,355 | $ 61,444 | $ 67,588 | $ 73,660 | $ 78,851 | $ 80,400 | |

NOPAT | 11,621 | 13,851 | 14,526 | 15,802 | 16,103 | 15,609 | |

NOA | 51,488 | 57,157 | 62,873 | 68,521 | 72,674 | 74,101 |

2016 | 2017 | 2018 | 2019 | Terminal Period | |
---|---|---|---|---|---|

Free cash flows to the firm | $Answer | $Answer | $Answer | $Answer | $Answer |

Answer #1

Computing Free Cash Flows to the Firm
(FCFF)
Use the following data to compute free cash flows to the firm
for Intel Corporation for 2016 through the terminal period.
Reported
Horizon Period
Terminal
$ millions
2015
2016
2017
2018
2019
Period
Sales
$ 55,355
$ 61,444
$ 67,588
$ 73,660
$ 78,851
$ 80,400
NOPAT
11,510
13,740
14,415
15,691
15,992
15,498
NOA
51,488
57,157
62,873
68,521
72,674
74,101
2016
2017
2018
2019
Terminal Period
Free cash flows to the firm

Computing Present Value of Terminal Period
FCFF
Use the following data to compute the present value of the
terminal period free cash flows to the firm for each of the four
firms A, B, C, and D. The forecast horizon included four years.
A
B
C
D
Terminal period free cash flow to the firm (FCFF)
$57,115
$1,258
$85,962
$29,117
WACC
5.0%
6.2%
4.3%
11.0%
Terminal period growth rate
1.0%
1.0%
2.0%
1.5%
Round answers to the nearest whole number....

Estimating Share Value Using the DCF Model
Following are the income statement and balance sheet for Texas
Roadhouse for the year ended December 29, 2015.
a. Assume the following forecasts for TXRH’s sales, NOPAT, and
NOA for 2016 through 2019. Forecast the terminal period values
assuming a 1% terminal period growth rate for all three model
inputs: Sales, NOPAT, and NOA.
Round your answers to the nearest dollar.
Reported
Forecast Horizon
Terminal
$ thousands
2015
2016
2017
2018
2019
Period...

Following are forecasts of Target Corporation's sales, net
operating profit after tax (NOPAT), and net operating assets (NOA)
as of January 30, 2016
Reported
Horizon Period
Terminal
$ millions
2016
2017
2018
2019
2020
Period
Sales
$74,340
$75,827
$77,344
$78,891
$80,469
$81,274
NOPAT
3,345
3,412
3,480
3,550
3,621
3,657
NOA
22,302
22,748
23,203
23,667
24,141
24,382
Answer the following requirements assuming a terminal period growth
rate of 1%, a discount rate (WACC) of 6%, common shares outstanding
of 602 million,...

Question text Estimating Share Value Using the DCF Model
Following are the income statement and balance sheet for Texas
Roadhouse for the year ended December 29, 2015. a. Assume the
following forecasts for TXRH’s sales, NOPAT, and NOA for 2016
through 2019. Forecast the terminal period values assuming a 1%
terminal period growth rate for all three model inputs: Sales,
NOPAT, and NOA. Round your answers to the nearest dollar.
Reported
Forecast Horizon
Terminal
$ thousands
2015
2016
2017
2018...

Assume the following expected free cash flows for Peterson
Corporation for 2017:
Current
Forecast Horizon
Terminal Year
2017
2018
2019
2020
2021
Free cash flows to the firm
(FCFF)
$4,651
$4,884
$5,128
$5,384
$5,653
$5,766
The company has net nonoperating
obligations (NNO) of $12,000 and 3,000 shares outstanding.
Calculate the per share stock price
using the FCFF information above, a discount rate of 7%, and a
terminal growth rate of 2%.

Estimating Share Value Using the DCF Model
Following are forecasts of Abercrombie & Fitch's sales, net
operating profit after tax (NOPAT), and net operating assets (NOA)
as of January 29, 2011. (Current-year NOPAT is lower due to
transitory items; we use a longer term estimate for NOPM of
8%.)
Reported
Horizon Period
(In millions)
2011
2012
2013
2014
2015
Terminal Period
Sales
$ 3,469
$ 3,989
$ 4,587
$ 5,275
$ 6,066
$ 6,187
NOPAT
152
319
367
422
485...

Horizon Value of Free Cash Flows
Current and projected free cash flows for Radell Global
Operations are shown below.
Actual
2016
2017
Projected
2018
2019
Free cash flow
$606.82
$667.50
$707.55
$750.00
(millions of dollars)
Growth is expected to be constant after 2018, and the weighted
average cost of capital is 11.05%. What is the horizon (continuing)
value at 2019 if growth from 2018 remains constant? Round your
answer to the nearest dollar. Do not round intermediate
calculations

Horizon Value of Free Cash Flows Current and projected free cash
flows for Radell Global Operations are shown below.
Actual
2016
2017
Projected
2018
2019
Free cash flow
$602.40
$663.08
$703.13
$759.38
(millions of dollars)
Growth is expected to be constant after 2018, and the weighted
average cost of capital is 11.55%. What is the horizon (continuing)
value at 2019 if growth from 2018 remains constant? Round your
answer to the nearest dollar. Round intermediate calculations to
two decimal places.

Problem 7-07
Horizon Value of Free Cash Flows
Current and projected free cash flows for Radell Global
Operations are shown below.
Actual
2016
2017
Projected
2018
2019
Free cash flow
$612.00
$672.68
$712.73
$769.75
(millions of dollars)
Growth is expected to be constant after 2018, and the weighted
average cost of capital is 11.2%. What is the horizon (continuing)
value at 2019 if growth from 2018 remains constant? Round your
answer to the nearest dollar. Round intermediate calculations to
two...

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