as it is a questions for accounting so iam not sure about words so please do it properly thx
ACC306 Individual Assignment Requirement: Two calculation questions, one is from Chapter 4, the other is from chapter 11, 10 marks each, in total 20 marks. Font size is 12, 1.5-line space. Harvard reference system Similarity rate must be lower than 20%, otherwise you will receive penalty, over than 40%, you will receive zero mark. Chapter 4: A Discounted Cash Flow Valuation: General Mills, Inc. (10 marks) At the beginning of its fiscal year 2006, an analyst made the following forecast for General Mills, Inc., the consumer foods company, for 2006-2009 (in millions of dollars): 200520062007 2008 2009 Cash flow from operations 2,014 2,057 2,095 2,107 Cash investment in operations 300 380 442 470 General Mills reported $6, 192 million in short-term and long-term debt at the end of 2005 but very little in interest-bearing debt assets. Use a required return of 9 percent to calculate both the enterprise value and equity value for General Mills at the beginning of 2006 under two forecasts for long-run cash flows: a. Free cash flow will remain at 2009 levels after 2009. b. Free cash flow will grow at 3 percent per year after 2009. General Mills had 369 million shares outstanding at the end of 2005, trading at $47 per share. Calculate value per share and a value-to-price ratio under both scenarios. a. The exercise involves calculating free cash flows, discounting them to present value, then adding the present value of a continuing value. For part (a) of the question, the continuing value has no growth: Chapter 11: Free Cash Flow for Kimberly-Clark Corporation (10 marks) Below are summary numbers from reformulated balance sheets for 2007 and 2006 for Kimberly-Clark Corporation, the paper product s company, along with numbers from the reformulated income statement for 2007 (in millions of dollars). 2007 2006 Operating assets $18, 057.0 $16,796.2 Operating liabilities 6 , 011.8 5,927.2 Financial assets 382.7 270.8 Financial obligations 6,496.4 4,395.4 Operating income (after tax) $2,740.1 Net financial expense (after tax) 147.1 a. The net payout to shareholders (dividends and share repurchases minus share issues) in 2007 was $3,405.9 million. Calculate free cash flow using Method 1 and Method 2. b. The firm reported cash flow from operation s of $2,429 million in its 2007 cash flow statement and also reported net interest payments of $142.4 million. It reported $898 million in cash spent on investing activities, but this was after including a net $56 million from liquidating short-term interest-bearing securities. The firm's statutory tax rate is 36.6 percent. Calculate free cash flow from these reported numbers. 1 1 ACC306 Individual Assignment Requirement: Two calculation questions , one is from Chapter 4, the other is from chapter 11, 10 marks each, in total 20 marks. Font size is 12, 1.5 - line space. Harvard reference system Similarity rate must be lower than 20%, otherwise you will receive penalty, over than 40%, you will receive zero mark. 1 ACC306 Individual Assignment Requirement: Two calculation questions, one is from Chapter 4, the other is from chapter 11, 10 marks each, in total 20 marks. Font size is 12, 1.5-line space. Harvard reference system Similarity rate must be lower than 20%, otherwise you will receive penalty, over than 40%, you will receive zero mark.