Kiyanna Grimes
Accounting 210 Homework
Chapter 4-11, Minicase 4.1
4-11 General Motors
Minicase 4.1: Discounted Cash Flow of Coca Cola
Price: $62
Trailing P/E: 23.9
P/B 6.6
P/Sales: 5.0
Annual Sales: 28.9 Billion
Market Cap: 143.7 Billion
•Free Cash Flow 2008-2010
Enterprise Value: 110,115
Net Debt: 12,235
Value of Equity: 97,880 Value per Share: 97,880/2,318= $42.23/share
CV based on FCF growing 4%
The market price is $62
Free cash flow is declining every year. Doesn’t necessarily mean the company is declining.
It looks as if Coca Cola was investing at large rates. This means we can expect more cash
in the future from the investments.