Economics Homework Help

1. Go back to our Apple valuation model we worked and use the DCF Excel model with the data given in the class.

Use the EBITDA Multiple of 5.0x and determine what is the implied share price. Explain how would you chose the Exit Multiple. Under the assumptions of this scenario would you invest in this stock? Why? (after you make the appropriate changes, take a screenshot of the DCF model and paste it below)

2. Create a copy of the DCF model in the same workbook. On this second copy of the DCF model, using a terminal growth rate of 0.5% and the rest of your inputs listed on our DCF workbook, calculate the FCFs, equity value, enterprise value, terminal value. What is the implied price per share under this scenario? Under the assumptions of this scenario would you invest in this stock? Why? Take a screenshot and paste this 2nd copy of the DCF model below. Submit only one workbook with the 2 DCF sheets for problems 7 and 8.

3. Based on your findings according to the valuation methodologies applied above at questions 7 and 8, would you invest in this stock or not if the current stock price is $220? Why? Why not? Be as specific as possible, but stick to the explanations related to our models not the general explanations. Please explain