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Suppose from the most recent JDs 10K, EBIT is $520, its tax rate is 35%,...

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Finance

Suppose from the most recent JDs 10K, EBIT is $520, its tax rate is 35%, depreciation is $26, capital expenditures are $66, and the planned increase in net working capital is $32. What is the free cash flow to the firm? Analysts expect a strong growth for JDs cash flow in the next two years at 20% each year. Afterwards, everything will slow down to a permanent 5% annual growth. The cost of capital for JD is 13% and JD has a $400 market value of debt outstanding. What is the firm value? What is the value of the equity? (All numbers in millions) (Hint: = (1) + . ).

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