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1. At the beginning of its fiscal year 2020, an analyst made the following forecast for Greenfield, Inc. (in millions of dollars):

	2020	2021	2022	2023
Cash flow from operation	$1,234	$2,568	$3,755	$2,100
Cash investment	428	489	502	756

Greenfield has a net debt of $1,950 at the end of 2019. Assume that free cash flow will grow at 4 percent per year in 2024 and 2025, after that this will grow at 5 percent per year. Greenfield had 425 million shares outstanding at the end of 2019, trading at $72.5 per share. Using a required return of 9 percent, calculate the following for Greenfield at the beginning of 2020 (You have to fill in the table below, and also show your working process):

1. The enterprise value

[5 marks]

2. Equity value

[2 mark]

3. Equity value per share

[1 mark]

4. Based on your estimate, should investors buy the share of this company?

[1 mark]

		2020	2021	2022	2023	2024	2025
Cash flow from operation
Cash investment
Free cash flow
Discount rate
PV of FCF
Total PV till 2023
Continuing value (CV)
PV of CV

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