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Start with the partial model in the file Ch13 P11 Build a Model.xls on the textbook's Web site. The Henley Corporation is a privately held company...

I need help with the following:a. Forecast the parts of the income statement and balance sheet that are necessary forcalculating free cash flow.b. Calculate free cash flow for each projected year. Also calculate the growth rates of freecash flow each year to ensure that there is constant growth (that is, the same as theconstant growth rate in sales) by the end of the forecast period.c. Calculate operating profitability (OP = NOPAT/Sales), capital requirements (CR =Operating capital/Sales), and expected return on invested capital (EROIC = ExpectedNOPAT/Operating capital at beginning of year). Based on the spread between EROICand WACC, do you think that the company will have a positive Market Value Added(MVA = Market value of company − Book value of company = Value of operations −Operating capital)?d. Calculate the value of operations and MVA. (Hint: First calculate the horizon value atthe end of the forecast period, which is equal to the value of operations at the end ofthe forecast period.) Assume that the annual growth rate beyond the horizon is 6%.e. Calculate the price per share of common equity as of 12/31/2010.Mini Case

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