We have a company that will exist for only three years it is an oil exploration company that will cease operations in three years). Valuing this company will NOT include a horgon value because it cases operations in three years. Since depreciation is included somewhere in "Expenses" (we have no way to find its value without a full accounting of expenses), your Free Cash Flow valuation will use the equation FCF - NOPAT-A Operating Capital 3553 Debt shares of common price per share cost of debt cost of equity WACC - WACC Debu(Debt + Equity Xcost of debe X (-T)+ Equity (Debt + Equity) X(cost of equity) from today or year o balance sheet Equity number of shares X price per share Tax rate 259 Revenues Expenses Operating income Interest today Years Year Yea3 1000 1150 1265 906 1905 1130 93.6 115 135 7.1 7.2 7.9 86 5107127 21.6 262317 649 80.2 95.3 EBT Taxes Net income Your assignment on this sheet: 1. Value the company using Free Cash Flow Model 2. Value the company using the Economic Profit Model Operating current assets Net PPE Operating assets 360 400 345 18421262 549- 4 631 707 Operating current liabilities Debt Equity Liabilities and equity 80 200 230 118.4 128 131 251303346 5494 631 707 Re-write the Balance sheets: NOWC NFA Operating Assets Debt Equity Operating Capital We have a company that wil exist for only three years it is an oil exploration company that will cease operations in three years). valuing this company will NOT include a horizon value because it ceases operations in three years. Since depreciation is included somewhere in "Expenses" (we have no way to find its value without a full accounting of expenses, your Free Cash Flow valuation will use the equation FCF - NOPATA Operating Capital today 35.53 Years Yeara Year 1000 110 1265 906 1935 139 936 115 135 shares of common price per share con of debt Com of equity WACC - WACC - Debt/Debt. Equity) X (cost of debt) X (1-1). Equity/Debt Equity) X (cost of equity) Debt from today or year o balance sheet Equity number of shares Xprice per share Tarte 20 Expenses Operating income Interest 86.5 107 127 216 262312 669 02 953 Your assignment on this sheet: 1. Valve the company using Free Cash Flow Model 2. Value the company using the Economic Profit Model Net Income Operating current assets Net PPE Operating assets 360 189.4 549.4 400 231 631 345 362 707 Operating current liabilities Debt Equity Liabilities and equity 180 118.4 251 549.4 200 128 303 631 346 707 Re-write the Balance sheets: NOWC NFA Operating Assets Debt Equity Operating Capital We have a company that will exist for only three years it is an oil exploration company that will cease operations in three years). Valuing this company will NOT include a horgon value because it cases operations in three years. Since depreciation is included somewhere in "Expenses" (we have no way to find its value without a full accounting of expenses), your Free Cash Flow valuation will use the equation FCF - NOPAT-A Operating Capital 3553 Debt shares of common price per share cost of debt cost of equity WACC - WACC Debu(Debt + Equity Xcost of debe X (-T)+ Equity (Debt + Equity) X(cost of equity) from today or year o balance sheet Equity number of shares X price per share Tax rate 259 Revenues Expenses Operating income Interest today Years Year Yea3 1000 1150 1265 906 1905 1130 93.6 115 135 7.1 7.2 7.9 86 5107127 21.6 262317 649 80.2 95.3 EBT Taxes Net income Your assignment on this sheet: 1. Value the company using Free Cash Flow Model 2. Value the company using the Economic Profit Model Operating current assets Net PPE Operating assets 360 400 345 18421262 549- 4 631 707 Operating current liabilities Debt Equity Liabilities and equity 80 200 230 118.4 128 131 251303346 5494 631 707 Re-write the Balance sheets: NOWC NFA Operating Assets Debt Equity Operating Capital We have a company that wil exist for only three years it is an oil exploration company that will cease operations in three years). valuing this company will NOT include a horizon value because it ceases operations in three years. Since depreciation is included somewhere in "Expenses" (we have no way to find its value without a full accounting of expenses, your Free Cash Flow valuation will use the equation FCF - NOPATA Operating Capital today 35.53 Years Yeara Year 1000 110 1265 906 1935 139 936 115 135 shares of common price per share con of debt Com of equity WACC - WACC - Debt/Debt. Equity) X (cost of debt) X (1-1). Equity/Debt Equity) X (cost of equity) Debt from today or year o balance sheet Equity number of shares Xprice per share Tarte 20 Expenses Operating income Interest 86.5 107 127 216 262312 669 02 953 Your assignment on this sheet: 1. Valve the company using Free Cash Flow Model 2. Value the company using the Economic Profit Model Net Income Operating current assets Net PPE Operating assets 360 189.4 549.4 400 231 631 345 362 707 Operating current liabilities Debt Equity Liabilities and equity 180 118.4 251 549.4 200 128 303 631 346 707 Re-write the Balance sheets: NOWC NFA Operating Assets Debt Equity Operating Capital