Chapter 4 Discounted Cash Flow Valuation - General Mills Inc

Added on - 21 Jul 2020

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Table of ContentsINTRODUCTION...........................................................................................................................1CHAPTER 4: DISCOUNTED CASH FLOW VALUATION: GENERAL MILLS, INC.............1(A). Calculation of free cash flow, discounting, continuing value..............................................1a. FCF remains constant at 2009 level after 2009........................................................................1b. FCF will grow at 3% after 2009..............................................................................................2CHAPTER 11: FREE CASH FLOW FOR KIMBERLY-CLARK CORPORATION...................3A. Calculation of free cash flow..................................................................................................3B. Calculation of free cash flow...................................................................................................4CONCLUSION................................................................................................................................4REFERENCES................................................................................................................................5
INTRODUCTIONIn corporate finance, analyst uses various methods for valuation purpose. Discountedcash flow valuation is one of the techniques in which, prediction about future investmentopportunity and its attractiveness is determined by discounting potential year’s free cash flow topresent their today’s value. The aim of the assignment is to perform necessary calculation todetermine free cash flow, continuing value and equity value as well.CHAPTER 4: DISCOUNTED CASH FLOW VALUATION: GENERALMILLS, INC(A). Calculation of free cash flow, discounting, continuing valueDCF method of valuation emphasizes on predicting cash flow for future period anddiscount them using cost of capital to find out present value (Christersson, Vimpari and Junnila,2015).a. FCF remains constant at 2009 level after 20092006(AUDmillion)2007(AUDmillion)2008(AUDmillion)2009(AUDmillion)Cash flow fromoperationsGiven2014205720952107Cash investment inoperational activitiesGiven300380442470Free cash flow (FCF)Cash flow fromoperation-Cashinvestment17141677165316371
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