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You are building a free cash flow to the firm model. You expect sales to grow from $2 billion for the year that just ended to $3.2 billion five years from now. Assume that the company will not become any more or less efficient in the future. Use the following information to calculate the value of the equity on a per-share basis. 2. Assume that the company currently has $720 million of net PPE. b. The company currently has $240 million of net working capital c. The company has operating margins of 11 percent and has an effective tax rate of 30 percent. d. The company has a weighted average cost of capital of 9 percent. This is based on a capital structure of two-thirds equity and one-third debt. e. The firm has 3 million shares outstanding Do not round intermediate calculations. Round your answer to the nearest cent, You are building a free cash flow to the firm model. You expect sales to grow from $2 billion for the year that just ended to $3.2 billion five years from now. Assume that the company will not become any more or less efficient in the future. Use the following information to calculate the value of the equity on a per-share basis a. Assume that the company currently has $540 million of net PP&E. b. The company currently has $180 million of net working capital c. The company has operating margins of 12 percent and has an effective tax rate of 30 percent. d. The company has a weighted average cost of capital of 11 percent. This is based on a capital structure of two-thirds equity and one-third debt e. The firm has 1 million shares outstanding. Do not round intermediate calculations. Round your answer to the nearest cent. $ 84.00 X Hide Feedback Incorrect Post Submission Feedback Solution Sales (millions) Growth for 5 years = (3.2/2)1/5-1 Operating margins Tax rate WACC PP&E/Sales ($540/$2,000) NWC/Sales ($180/$2,000) $2,000 9.86% 12% 30% 11% 27% 9% ($ millions) Year Sales EBIT Taxes NOPAT Net Can Fx 1 2 3 5 6 $2,197.12 $2,413.67 $2,651.56 $2,912.90 $3,200.00 $3,515.39 $263.65 $289.64 $318.19 $349.55 $384.00 $421.85 -$79.10 -586.89 -595.46 -$104.86 -$115.20 $126.55 $184.56 $202.75 $222.73 $244.68 $268.80 $295.29 -$53.22 -$58,47 - $64.23 -$70.56 $77.52 -$85.16 -$28.39 $181.75 Change in NWC FCF Terminal Value PV of Cash Flows EV Less Debt (1/3 of EV) Equity Value -$17.74 -$19.49 -$21.41 -$23.52 -$25.84 $113.59 $124.79 $137.09 $150.60 $165.44 $1,652.28 $102.34 $101.28 $100.24 $99.21 $1,078.73 $1,481.80 -$493.93 $987.87 Equity Value per Share = $987.87 million / 1 million shares = $987.87 Note: While the calculations above show values rounded to 2 decimal places, unrounded values should be used to calculate the required values