EBK CORPORATE FINANCE
4th Edition
ISBN: 8220103164535
Author: DeMarzo
Publisher: PEARSON
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Textbook Question
Chapter 2, Problem 27P
Find online the annual 10-K report for Costco Wholesale Corporation (COST) for fiscal year 2015 (filed in October 2015). Answer the following questions from the notes to their financial statements:
- a. How many stores did Costco open outside of the U.S. in 2015?
- b. What property does Costco lease? What are the minimum lease payments due in 2016?
- c. What was Costco’s worldwide member renewal rate for 2015? What proportion of Costco cardholders had Gold Star memberships in 2015?
- d. What fraction or Costco’s 2015 sales came gas stations, pharmacy, rood court, and optical? What fraction came from apparel end small appliances?
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(d) Estimate the value of a share of Cisco common stock using the discounted cash flow (DCF) model as of July 27, 2019 using the following assumptions
Assumptions
Discount rate (WACC)
Common shares outstanding
7.60%
5,029.00 million
Net nonoperating obligations (NNO) $(8,747) million
NNO is negative, which means that Cisco has net nonoperating investments
CSCO
($ millions)
DCF Model
Reported
2019
Forecast Horizon
2020 Est.
2021 Est.
2022 Est.
2023 Est.
Terminal
Period
Increase in NOA
FCFF (NOPAT - Increase in NOA)
$
1241
1303
1368
10673
11207
11767
1437 $
12354
302 ✓
Present value of horizon FCFF
9918
9679
9445 ✔
0 ×
Cum. present value of horizon FCFF $
0 ×
Present value of terminal FCFF
0 ☑
Total firm value
0 ☑
NNO
-8747 ✓
Firm equity value
$
0 ☑
Shares outstanding (millions)
5029
Stock price per share
$
40.05
Don't used hand raiting and don't used Ai solution
Don't used hand raiting and don't used Ai solution
Chapter 2 Solutions
EBK CORPORATE FINANCE
Ch. 2.1 - Prob. 1CCCh. 2.1 - Prob. 2CCCh. 2.2 - Prob. 1CCCh. 2.2 - Prob. 2CCCh. 2.2 - Prob. 3CCCh. 2.3 - What it is the difference between a firms gross...Ch. 2.3 - What is the diluted earnings per share?Ch. 2.4 - Prob. 1CCCh. 2.4 - Prob. 2CCCh. 2.5 - Prob. 1CC
Ch. 2.5 - Prob. 2CCCh. 2.6 - Why is EBITDA used to assess a firms ability to...Ch. 2.6 - Prob. 2CCCh. 2.6 - Prob. 3CCCh. 2.6 - Prob. 4CCCh. 2.7 - Describe the transactions Enron used to increase...Ch. 2.7 - Prob. 2CCCh. 2 - Prob. 1PCh. 2 - Prob. 2PCh. 2 - Consider the following potential events that might...Ch. 2 - What was the change m Global Conglomerates book...Ch. 2 - Find online the annual 10-K report for Costco...Ch. 2 - In early 2012, General Electric (GE) had a book...Ch. 2 - In early-2015, Abercrombie Fitch (ANF) had a book...Ch. 2 - Prob. 10PCh. 2 - Suppose that in 2016, Global launches an...Ch. 2 - Find online the annual 10-K report for Costco...Ch. 2 - Prob. 13PCh. 2 - Prob. 14PCh. 2 - See Table 2.5 showing financial statement data and...Ch. 2 - See Table 2.5 showing financial statement data and...Ch. 2 - Suppose a firms tax rate is 35%. a. What effect...Ch. 2 - Prob. 18PCh. 2 - Prob. 19PCh. 2 - See Table 2.5 showing financial statement data and...Ch. 2 - See Table 2.5 showing financial statement data and...Ch. 2 - Prob. 22PCh. 2 - Can a firm with positive net income run out of...Ch. 2 - Suppose your firm receives a 5 million order on...Ch. 2 - Nokela Industries purchases a 40 million...Ch. 2 - See Table 2.5 showing financial statement data and...Ch. 2 - Find online the annual 10-K report for Costco...Ch. 2 - Prob. 28PCh. 2 - For fiscal year end 2015, Wal-Mart Stores, Inc....Ch. 2 - Prob. 30PCh. 2 - See Table 2.5 showing financial statement data and...Ch. 2 - See Table 2.5 showing financial statement data and...Ch. 2 - See Table 2.5 showing financial statement data and...Ch. 2 - See Table 2.5 showing financial statement data and...Ch. 2 - Use the data in Problem 8 to determine the change,...Ch. 2 - You are analyzing the leverage of two firms and...Ch. 2 - Prob. 37PCh. 2 - Prob. 38PCh. 2 - Prob. 39PCh. 2 - Prob. 40PCh. 2 - Prob. 41PCh. 2 - Prob. 42PCh. 2 - Consider a retailing firm with a net profit margin...Ch. 2 - Prob. 44PCh. 2 - Prob. 45P
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