Chevrolet is attempting to shift away from its reliance on gas truck sales and compete in the electric car market. We are looking to value Chevy's stock in light of this strategic shift in direction. This year, we expect that Chevy will do $148 billion in sales, $12 billion higher than last year's $136 billion. After covering COGS, depreciation ($6 billion this year), R&D, and SG&A, analysts expect that Chevy will realize a 7.8% pre-tax operating margin. Assume that they reinvest $6.5 billion per year in Capital Expenditures and that their working capital comprises fifteen percent of their annual sales. Given recent tax law changes, they expect to have a 25% corporate income tax rate going forward. 1. What is your estimate of Chevy's free cash flow this year? 2. Given their significant use of debt, their bond rating is low resulting in a borrowing rate of 7%. Equity investors anticipate significant risk given the challenges in the automobile market and demand a 12% rate of return. Chevy's target capital structure is approximately 75% debt and 25% equity. Assuming this is the capital structure they ultimately realize, what is an appropriate Weighted Average Cost of Capital (WACC) for Chevy? 3. Assume that with this change in strategy, we expect Chevy to increase its long-term growth forecast to 3.6%. Chevy's current capital structure is comprised of $139.5 billion in debt and 4.12 billion equity shares outstanding. What is your estimate of the intrinsic value of one share of Chevy stock?

*Please show all formulas and work in Excel