Discounted cash flow (DCF), estimate future Free cash flow (FCF) of the firm based on the following definition: FCF=(NOPAT- change in NWC-capital expenditure + Depreciation), where NOPAT=EBIT (1-tax rate). Complete the 2-stage model to assign a price to LOccitanes shares. List and justify the assumptions that you make.

L'Occitane Valuations in millions of euros, unless stated otherwise) Lont-term Growth rate 5.00% Discount rate 10% Tax rate 23% 1 2 3 4 Projected New Stores 2010 2011 2012 2013 2014 2015 Est. Proj. Proj. Proj. Proj. Proj. 5 609 951 Net sales EBIT NOPAT(=EBIT(1-t)) 729 135 847 160 1,055 200 1,159 219 180 NWC(=Trade receivables+Inventory-Trade payables) Capital expenditures Depreciation FCF=(NOPAT-change in NWC-capital exp+Dep) Terminal value PV Value of operation Debt Equity value =(Vop-debt) Shares outstandig Price/share L'Occitane Valuations in millions of euros, unless stated otherwise) Lont-term Growth rate 5.00% Discount rate 10% Tax rate 23% 1 2 3 4 Projected New Stores 2010 2011 2012 2013 2014 2015 Est. Proj. Proj. Proj. Proj. Proj. 5 609 951 Net sales EBIT NOPAT(=EBIT(1-t)) 729 135 847 160 1,055 200 1,159 219 180 NWC(=Trade receivables+Inventory-Trade payables) Capital expenditures Depreciation FCF=(NOPAT-change in NWC-capital exp+Dep) Terminal value PV Value of operation Debt Equity value =(Vop-debt) Shares outstandig Price/share