(d) Estimate the value of a share of Cisco common stock using the discounted cash...
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Accounting
(d) Estimate the value of a share of Cisco common stock using the discounted cash flow (DCF) model as of July 27, 2019; assume a discount rate (WACC) of 7.6%, common shares outstanding of 5,029 million, and net nonoperating obligations (NNO) of $(8,747) million (NNO is negative, which means that Cisco has net nonoperating investments)
Instructions:
Use your rounded answers for subsequent calculations.
Round all answers to the nearest whole number, except for discount factors and stock price per share.
Round discount factors to 5 decimal places.
Round stock price per share to two decimal places.
Use a negative sign with your NNO answer.
CSCO
Reported
Forecast Horizon
Terminal
($ millions)
2019
2020 Est.
2021 Est.
2022 Est.
2023 Est.
Period
DCF Model
Increase in NOA
Answer
Answer
Answer
Answer
Answer
FCFF (NOPAT - Increase in NOA)
Answer
Answer
Answer
Answer
Answer
Discount factor
Answer
Answer
Answer
Answer
Present value of horizon FCFF
Answer
Answer
Answer
Answer
Cummulative present value of horizon FCFF
Answer
Present value of terminal FCFF
Answer
Total firm value
Answer
NNO
Answer
Firm equity value
Answer
Shares outstanding (millions)
Answer
Stock price per share
Answer
Answer & Explanation
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