discounted cash flow valuation AAAPL

Anonymous
timer Asked: Nov 26th, 2016

Question description

wondering if you have time to complete a project for me for Sunday.

See details below: The company is AAPL or Apple

1. Using the facilities of ValuePro (http://www.valuepro.net) for the company that you have selected to study conduct a discounted cash flow valuation.

2. The analysis should explain each variable used in the analysis, why you accepted the given input, or how and why you changed a variable.

3. The analysis should also examine the relevant cash flows, compare the final valuation to the stock’s current price and explain any differences.(Note: Remember to adjust the equity risk premium to between 5% and 6%; also, adjust the growth rate to an appropriate long-term growth rate.)

Table 1

Assumptions for ValuePro.net Valuation

Company Name - Apple (AAPL)

ValuePro.netAssumptions

Your Assumptions

Explain the Reasoning for Your Assumptions

Excess Return Period (Years) (10 years is appropriate)

10

Revenues ($ mil) (From Income Statement)

169104

Growth Rate (%) (Estimated Annual Growth Rate in Earnings in Future)

14.5

Net Operating Profit Margin (%) (EBIT from Income Statement)

35.63

Tax Rate (%) (From Income Statement: Taxes / Earnings Before Taxes)

25.16

Stock Price ($) (Current Price per Share)

109.9

Shares of Stock Outstanding (mil.) (Be careful with decimal)

940.1

10 Yr. Treasury Bond Yield (%)

5

Bond Spread to Treasury (%) (1.5 is appropriate)

1.5

Preferred Stock Yield (%)

7.5

Depreciation Rate (%) (Percentage of Revenue; Calculate)

2.09

Investment Rate (%) (Percentage of Revenue for Capital Expenditures - Calculate)

5.3

Working Capital (%) (Percentage of Revenue – WC is Current Assets; Calculate)

-6.04

Short Term Assets ($ mil.) (Current Assets from Balance Sheet)

63337

Short-Term Liabilities ($ mil.) (Current Liabilities from Balance Sheet)

39913

Equity Risk Premium % (Should be between 5% and 6%)

3

Company Beta for Stock (Number) (Look up Beta)

1.05

Value (Book) of Debt Outstanding ($ mil.) (L-T + S-T Debt from Balance Sheet)

0

Value Preferred Stock Outstanding ($ mil)

0

Company WACC (%) (Look up or Calculate)

8.15

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