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You are interested in valuing the Boeing Company.

The company just reported net income of $5.5 billion after interest expense of $333 million. The company's corporate tax rate is 35% and the depreciation expense was $1.91 billion. Capital expenditures amounted to $2.23 billion. Assume that there is no investment in NWC.

Boeing executives are forecasting a 4% growth in free cash flow in perpetuity.

Boeing has an equity beta of 0.92 and a D/E ratio of .10. Assume a cost of debt of 4%, a risk free rate of 2%, and an equity risk premium of 6%

A. Estimate Boeing's enterprise value

B. What would Boeing's growth rate have to be in perpetuity for the company to have an enterprise value of $90.49 billion?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92767178

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