FSA HW3.docx - 4.4 Reported cash flow from operation Interest payment 1342 Interest income(876 Net interest payment 466 Taxes(35 163 Net interest

FSA HW3.docx - 4.4 Reported cash flow from operation...

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4.4) Reported cash flow from operation 5270 Interest payment 1342 Interest income (876) Net interest payment 466 Taxes (35%) 163 Net interest payment after tax 302,9 Cash flow from operation 5572,9 Reported cash used in investing activities 6719 Free cash flow (844) 4.7) Reported cash flow from operation 7150 Interest payment 405 Interest income (236) Net interest payment 169 Taxes (36%) 60,84 Net interest payment after tax 108,16 Cash flow from operation 7258,16 Reported cash used in investing activities 6719 Purchases of interest bearing securities 99 Sales of interest bearing securities (448) Cash investment in operation 7068 Free cash flow 190,16 4.8) Converting forecast of free CF to a valuation: At the beginning of 2004, Coca-Cola did not invest their money. They just had so much free cash flow. But, over the four years they did investment. 4.10) A discount CF valuation: 2006 2007 2008 2009 Cash flow from operation 2014 2057 2095 2107 Investment in operation 300 380 442 470 Free cash flow 1714 1677 1653 1637
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Discount rate(9%) 1,09 1,1881 1,295 1,4116 PV of CF 1572 1412 1276 1435 Total PV 2009 5695 Continuing value 28102 PV of CF 19908 Enterprise value 25603
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