FCFF

Given the following information about a company:

Sales for the year that just ended: $$2$ billion

Sales growth:

Sales growth for next $5$ years: $8\%$

Sales growth after Year $5$: $3\mathrm{.}5\%$

Operating margins $=23\%$

Tax rate $=27$ percent

Net margins $=14\%$

Market Value of Debt $=$$$0\mathrm{.}75$ billion

Pre$-$tax cost of debt $=6\%$

Number of shares outstanding $=0\mathrm{.}5$ billion

Book value of equity: $$17$ billion

Book value of assets: $$20$ billion

Percentage of NOPAT that must be reinvested:

Reinvestment rate Years $1-4$:$20\%$

Reinvestment rate after Year $4$:$10\%$

Market value of equity: $$15$ billion

Cost of Equity $=12\%$

Forecast: Sales, EBIT, Taxes, NOPAT, Reinvestment, FCFF and terminal value. Calculate the WACC and then calculate present values to determine the firm's Enterprise Value $($EV$).$ From EV$,$ determine the intrinsic value per share of stock. Be careful to maintain the same weight on debt and equity when calculating the intrinsic value.

Submit your Excel file showing all work. Clearly mark your answers.