You are an analyst at a large firm. The Chief Financial Officer presents the following free cash flow data for ABC Corp (in millions of $).

Year Cash Flow   

2010 1600

2011 2600

2012 3200

2013 3400

2014 2300

please calculate the:

-  Geometric Total Return

-  The Annualized Rate of Change

Then, the director asks you to make a 10 year cash flow forecast based upon the annualized rate of growth in cash flow.

Next, He asks you to calculate the NPV of the forecasted cash flows assuming an immediate investment cost of $19.8 billion.

To estimate the weighted average cost of capital, please use the following data points.

Market Value of Debt - $580,000,000 Market Value of Equity - $1,302,000,000

Current Yield to Maturity on Debt – 5.1875% Tax Rate – 35.2%

Expected Return on Market – 11.7% Current 10 year U.S. Treasury – 4.3% Beta – 2.41.