Question: How will the terminal values in Table 8.6 change if the revenue growth rate in year 2025 and beyond is 4 percent , and the

How will the terminal values in Table 8.6 change if the

How will the terminal values in Table 8.6 change if the revenue growth rate in year 2025 and beyond is 4 percent , and the company keeps forever its abnormal returns at the same level as in fiscal 2024 (keeping all the other assumptions in the table unchanges)? If revenue growth is 3 percent in 2024 and 4 percent in 2025 , why are the equity value estimates of the free cash flow model and the abnormal profit model no longer the same?

TABLE 8.6 Valuation summary for Hennes& Mauritz using various methodologies Value from Beginning book value Value beyond forecast horizon 2015-2024 (terminal value Total value Value per share (SEK) forecast period Equity value (SEK billions) Abnormal profit Abnormal profit growth Free cash flows to equity 51.6 N/A N/A 161.0 314.8 161.4 383.7 383.7 383.7 231.83 231.83 231.83 68.9 222.3 Net operating assets value (SEK billions) Abnormal NOPAT Abnormal NOPAT growth Free cash flows to capital 119.4 N/A N/A 133.5 326.6 136.0 126.5 52.8 243.3 379.4 379.4 379.4 N/A N/A N/A TABLE 8.6 Valuation summary for Hennes& Mauritz using various methodologies Value from Beginning book value Value beyond forecast horizon 2015-2024 (terminal value Total value Value per share (SEK) forecast period Equity value (SEK billions) Abnormal profit Abnormal profit growth Free cash flows to equity 51.6 N/A N/A 161.0 314.8 161.4 383.7 383.7 383.7 231.83 231.83 231.83 68.9 222.3 Net operating assets value (SEK billions) Abnormal NOPAT Abnormal NOPAT growth Free cash flows to capital 119.4 N/A N/A 133.5 326.6 136.0 126.5 52.8 243.3 379.4 379.4 379.4 N/A N/A N/A

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