discounted cash flow valuation AAAPL

 

 

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