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Question: Converting Forecasts of Free Cash Flow Valuation: Coca-Cola Company (Medium) After reviewing the discounted cash flow valuation of Coca-Cola in consider the free cash flows below that were reported by Coke for 2004-2007. They are based on the actual reported cash flows but are adjusted for interest and investments in interest-bearing securities (in millions of dollars).

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Pretend that you are sitting at the beginning of 2004, trying to value Coke, given these numbers as forecasts. What difficulties would you encounter in trying to value the firm at the beginning of 2004? What do you make of the declining free cash flows over the four years?

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