With the given information, how do you calculate -the growth rate -terminal value -Present value of terminal value -price per share.

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Then, we could find out the weighted average cost of capital (WACC) is 9.89%, as shown in the appendix. This could be used to discount our free cash flow from 2002-2009, and for future forecasting. In addition, in terms of the terminal value, it suggests a future cash flow of JetBlue after 2010. An important assumption is that we believe JetBlue will have perpetual growth in the future with a constant cash inflow, and combine with the inflation rate, the terminal rate is suggested to be 4.5%. Temimal Value 4.50% Cash Flow 2010*(1+ CF growth) / (WACC-CF growth) Calculate Free Cash Flow Change in Net Working Capital NOPAT + Depreciation - CapEx-Change in NWC FCF WACC Discount Factor DCF = CF/(1+WACC)^t PV of Temimal Value Estimate Firm Value shares outstanding share price 9.89% 1057.95 41 $25.80 29.56 -249.58 30.08 32.60 31.04 33.53 36.17 34.15 24.10 -243.50 -222.19 -147.71 -124.10 0.91 0.83 0.75 0.69 0.62 -227.12 -201.64 -167.43 -101.29 -77.45 -98.05 -10.66 0.57 0.52 -5.51 -55.68 171.85 4010.139 23.08 227.11 0.47 0.43 80.81 97.19 1716.073 Then, we could find out the weighted average cost of capital (WACC) is 9.89%, as shown in the appendix. This could be used to discount our free cash flow from 2002-2009, and for future forecasting. In addition, in terms of the terminal value, it suggests a future cash flow of JetBlue after 2010. An important assumption is that we believe JetBlue will have perpetual growth in the future with a constant cash inflow, and combine with the inflation rate, the terminal rate is suggested to be 4.5%. Temimal Value 4.50% Cash Flow 2010*(1+ CF growth) / (WACC-CF growth) Calculate Free Cash Flow Change in Net Working Capital NOPAT + Depreciation - CapEx-Change in NWC FCF WACC Discount Factor DCF = CF/(1+WACC)^t PV of Temimal Value Estimate Firm Value shares outstanding share price 9.89% 1057.95 41 $25.80 29.56 -249.58 30.08 32.60 31.04 33.53 36.17 34.15 24.10 -243.50 -222.19 -147.71 -124.10 0.91 0.83 0.75 0.69 0.62 -227.12 -201.64 -167.43 -101.29 -77.45 -98.05 -10.66 0.57 0.52 -5.51 -55.68 171.85 4010.139 23.08 227.11 0.47 0.43 80.81 97.19 1716.073

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Weighted Average Cost of Capital WACC The WACC is calculated to be 989 WACC represents the average r... View the full answer