OPTION #1

Selected data for the DB Corporation are shown in the Template for Option 1 (linked at the bottom of the page). Use the data to answer the following questions.

1. Calculate the estimated horizon value (i.e., the value of operations at the end of the forecast period immediately after the Year-4 free cash flow). Assume growth becomes constant after Year 3.
2. Calculate the present value of the horizon value, the present value of the free cash flows, and the estimated Year-0 value of operations.
3. Calculate the estimated Year-0 price per share of common equity. What do these values tell us about the organizations values in the future?

Your paper should meet the following requirements:

• Be approximately 2 pages in length, not including the cover page and reference page.
• Follow the APA guidelines. Each paper should include an introduction, a body with at least two fully developed paragraphs, and a conclusion.
• Support your answers with the readings from Module 3 and at least one scholarly journal article.
• Be clear and well written, concise, and logical, using excellent grammar and style techniques. You are being graded in part on the quality of your writing. If you need assistance with your writing style