Recalculate the intrinsic value of Honda shares using the free cash flow model of Spreadsheet 18.2 under

Question:

Recalculate the intrinsic value of Honda shares using the free cash flow model of Spreadsheet 18.2 under each of the following assumptions. Treat each scenario independently.

a. Honda's P/E ratio starting in 2016 will be 15.

b. Honda's unlevered beta is 0.7.

c. The market risk premium is 9%.

Spreadsheet 18.2

Recalculate the intrinsic value of Honda shares using the free

Free Cash Flow
Free cash flow (FCF) represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets. Unlike earnings or net income, free cash flow is a measure of profitability that excludes the...