Forecast the free cash flow


Problem 1. Forecast the Free Cash Flow for the next three FY under the assumption that sales will increase by 5% a year and that Staples will maintain all current ratios (depreciations in FY ending on January 31st, 2004 are $282. 811m);

Problem 2. The 30-years gov't bond rate is 5 %; please compute the cost of equity;

Problem 3.  Under the assumption that Staples maintains the current capital structure, and that at the current debt/equity ratio Staples can borrow at 6%, compute the cost of capital for Staples (current share price is $28.73);

Problem 4. Compute the terminal value, under the assumption that the FCF will grow at 2% per year afterward;

Problem 5. Determine the current value of Staples' assets. What is the value of Staples' equity?

By using the information reported in Yahoo for the Staples, at

https://finance.yahoo.com/q/is?s=SPLS&annual
https://finance.yahoo.com/q/bs?s=SPLS&annual
https://finance.yahoo.com/q/ks?s=SPLS

Please show all work.

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Finance Basics: Forecast the free cash flow
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