MM NOPAT 90.91 100.0 110 121 133 146 161 177 195 214 236 259 285 314 345 380 Investment in future 50 50 55 59 61 67 73 81 89 97 107 118 130 143 157 173 190 259 Free Cash Flow 50 50 55 55 60 60 67 73 81 89 97 107 118 130 143 157 173 190 130 PV of FCF 47 D Cumulative PV of FCF 47 77 48 95 145 649 50 51 53 55 56 58 196 249 304 360 418 00 00 60 62 64 99 66 68 70 72 130 478 540 603 669 736 806 878 64 Residual Value 1,642 1,806 1,987 PV of Residual Value 1,539 1,586 1,635 2,185 1,686 2,404 1,738 2,644 2,909 3,199 3,519 3,871 4,258 4,684 1,792 1,847 1,904 1,963 2,024 2,087 2,151 5,153 2,218 2,286 2,357 5,668 6,235 603 els cash Debt Corporate Value 1,586 1,681 1,780 1,882 1,987 2,096 2,207 2,322 2,441 2,563 2,690 2,820 4.258 2,954 3,092 3,234 2.087 2.690 [Shareholder value 1,586 1,681 1,780 1,882 1,987 Shares outstanding 2,096 2,207 2,322 1 21 2,441 2,563 2,690 2,820 2,954 3,092 3,234 1 .690 Shareholder value per share $1,586 $1,681 $1,780 $1,882 $1,987 $2,096 $2,207 $2,322 $2,441 $2,563 $2,690 $2,820 $2,954 $3,092 $3,234 Year 2 3 5 6 8 6 10 11 12 13 14 15 2,69
MM NOPAT 90.91 100.0 110 121 133 146 161 177 195 214 236 259 285 314 345 380 Investment in future 50 50 55 59 61 67 73 81 89 97 107 118 130 143 157 173 190 259 Free Cash Flow 50 50 55 55 60 60 67 73 81 89 97 107 118 130 143 157 173 190 130 PV of FCF 47 D Cumulative PV of FCF 47 77 48 95 145 649 50 51 53 55 56 58 196 249 304 360 418 00 00 60 62 64 99 66 68 70 72 130 478 540 603 669 736 806 878 64 Residual Value 1,642 1,806 1,987 PV of Residual Value 1,539 1,586 1,635 2,185 1,686 2,404 1,738 2,644 2,909 3,199 3,519 3,871 4,258 4,684 1,792 1,847 1,904 1,963 2,024 2,087 2,151 5,153 2,218 2,286 2,357 5,668 6,235 603 els cash Debt Corporate Value 1,586 1,681 1,780 1,882 1,987 2,096 2,207 2,322 2,441 2,563 2,690 2,820 4.258 2,954 3,092 3,234 2.087 2.690 [Shareholder value 1,586 1,681 1,780 1,882 1,987 Shares outstanding 2,096 2,207 2,322 1 21 2,441 2,563 2,690 2,820 2,954 3,092 3,234 1 .690 Shareholder value per share $1,586 $1,681 $1,780 $1,882 $1,987 $2,096 $2,207 $2,322 $2,441 $2,563 $2,690 $2,820 $2,954 $3,092 $3,234 Year 2 3 5 6 8 6 10 11 12 13 14 15 2,69
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
100%
According to the picture, It is a DCF method. But I'm not sure how they got the residual value of 1,642 in 1 year and so on. According to this, I don't know the terminal growth rate. Here are some inputs in the picture: NOPAT growth: 10%, ROIIC: 20%, Cost of capital: 6.7%, reinvestment rate: 10%/20% = 50%. Please Show how to get the exact residual value in the picture shown like first year, second year, third year, and so on.
Transcribed Image Text:MM
NOPAT
90.91
100.0
110
121
133
146
161
177
195
214
236
259
285
314
345
380
Investment in future
50
50
55
59
61
67
73
81
89
97
107
118
130
143
157
173
190
259
Free Cash Flow
50
50
55
55
60
60
67
73
81
89
97
107
118
130
143
157
173
190
130
PV of FCF
47
D Cumulative PV of FCF
47
77
48
95
145
649
50
51
53
55
56
58
196
249
304
360
418
00 00
60
62
64
99
66
68
70
72
130
478
540
603
669
736
806
878
64
Residual Value
1,642
1,806
1,987
PV of Residual Value
1,539
1,586
1,635
2,185
1,686
2,404
1,738
2,644 2,909 3,199 3,519 3,871 4,258 4,684
1,792 1,847 1,904 1,963 2,024 2,087 2,151
5,153
2,218 2,286 2,357
5,668 6,235
603
els cash
Debt
Corporate Value
1,586
1,681 1,780
1,882 1,987 2,096 2,207 2,322 2,441 2,563 2,690 2,820
4.258
2,954
3,092 3,234
2.087
2.690
[Shareholder value
1,586
1,681 1,780 1,882
1,987
Shares outstanding
2,096 2,207 2,322
1
21
2,441 2,563 2,690 2,820 2,954
3,092
3,234
1
.690
Shareholder value per share
$1,586
$1,681 $1,780 $1,882 $1,987 $2,096 $2,207 $2,322 $2,441 $2,563
$2,690 $2,820 $2,954
$3,092
$3,234
Year
2
3
5
6
8
6
10
11
12
13
14
15
2,69
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