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4.00%

$10,260

$6,433

40.00%

$2,573

$3,860

7.16%

$1,783

The terminal value is also pushed up, as a result of the higher growth in the high growth period:

Terminal value = FCFFn/(Cost of capital - g) = 6433 (1.04)/(.0716-.04) = $126,967 mil The value of the firm and the value per share can now be estimated: Present Value of FCFF in high growth phase = $16,254.91

+ Present Value of Terminal Value of Firm = $58,645.39

+ Value of Cash, Marketable Securities & Non-operating assets = $3,432.00

- Market Value of outstanding debt = $14,648.80

- Value of Equity in Options = $1,334.67 Value of Equity in Common Stock = $62,348.84 Market Value of Equity/share = $30.45

Disney's value per share increases from $11.14 per share in illustration 12.11 to $30.45 a share, when we make the changes to the way it is managed.36

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