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Compute the cash flow from operating activities

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Assume that the following financial numbers for McDonald's Corporation's most recent year have been provided to you. They are collected from the financial statements. Revenue $19,208,000,000. EBIT $8,025,400,000. Taxes $2,000,000,000. Depreciation $1,617,900,000. Cash $0. Debt $0. Change in Non-Cash Working Capital +$298,500,000. Capital Spending $1,901,700,000. Shares Outstanding 4,000,000,000. Compute the Cash Flow From Operating Activities and the Free Cash Flow. Show your figures and computations. Briefly interpret the result.

Now assume that McDonald's Corporation can grow 4% per year forever starting 1 year from now. The required return is 8%. Based on your analysis and computations for McDonald's in the previous question, compute the firm value and the equity value. Also compute the equity value per share. Show your figures and computations. Briefly interpret the results.

Reference no: EM133074775

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