The corporate valuation model, the price-to-earnings (P/E) multiple approach, and the economic value-added (EVA) approach are some examples of valuation techniques. The corporate valuation model is...


The corporate valuation model, the price-to-earnings (P/E) multiple approach, and the economic value-added<br>(EVA) approach are some examples of valuation techniques. The corporate valuation model is similar to the<br>dividend-based valuation that you've done in previous problems, but it focuses on a firm's free cash flows (FCFS)<br>instead of its dividends. Some firms don't pay dividends, or their dividends are difficult to forecast. For that<br>reason, some analysts use the corporate valuation model<br>Blur Corp. has an expected net operating profit after taxes, EBIT(1 - T), of $11,200 million in the coming year. In<br>addition, the firm is expected to have net capital expenditures of $1,680 million, and net operating working capital<br>(NOWC) is expected to increase by $20 million. How much free cash flow (FCF) is Blur Corp. expected to generate<br>over the next year?<br>$9,540 million<br>$174,783 million<br>$12,860 million<br>$9,500 million<br>Blur Corp.'s FCFs are expected to grow at a constant rate of 4.62% per year in the future. The market value of Blur<br>Corp.'s outstanding debt is $46,266 million, and preferred stocks' value is $25,703 million. Blur Corp. has 300 million<br>shares of common stock outstanding, and its weighted average cost of capital (WACC) equals 13.86%.<br>Using the preceding information and the FCF you<br>Value (Millions)<br>Term<br>calculated in the previous question, calculate the<br>Total firm value<br>appropriate values in this table.<br>Value of common equity<br>Intrinsic value per share<br>

Extracted text: The corporate valuation model, the price-to-earnings (P/E) multiple approach, and the economic value-added (EVA) approach are some examples of valuation techniques. The corporate valuation model is similar to the dividend-based valuation that you've done in previous problems, but it focuses on a firm's free cash flows (FCFS) instead of its dividends. Some firms don't pay dividends, or their dividends are difficult to forecast. For that reason, some analysts use the corporate valuation model Blur Corp. has an expected net operating profit after taxes, EBIT(1 - T), of $11,200 million in the coming year. In addition, the firm is expected to have net capital expenditures of $1,680 million, and net operating working capital (NOWC) is expected to increase by $20 million. How much free cash flow (FCF) is Blur Corp. expected to generate over the next year? $9,540 million $174,783 million $12,860 million $9,500 million Blur Corp.'s FCFs are expected to grow at a constant rate of 4.62% per year in the future. The market value of Blur Corp.'s outstanding debt is $46,266 million, and preferred stocks' value is $25,703 million. Blur Corp. has 300 million shares of common stock outstanding, and its weighted average cost of capital (WACC) equals 13.86%. Using the preceding information and the FCF you Value (Millions) Term calculated in the previous question, calculate the Total firm value appropriate values in this table. Value of common equity Intrinsic value per share

Jun 02, 2022
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