Year 1 FCFE = Earnings per share − (Capital Expenditures − Depreciation)(1 − Debt Ratio) − (Change in working capital)(1 − Debt Ratio) = 6.60 − (2.28 − 1.37) (1 − 0.25) − (1.1)(1 − 0.25) = 5.09.
Year 8 FCFE = Earnings per share − (Capital Expenditures − Depreciation)(1 − Debt Ratio) − (Change in working capital)(1 − Debt Ratio) = 24.27 × 1.05 − 0 − (2.25)(1 − 0.25) = 23.79.
The Terminal Value (as of Year 7) = 23.79 / (0.10 − 0.05) = 475.80.
The value of BOX, Inc., stock would be equal to: 5.09 / 1.25 + 7.63 / 1.252 + 11.01 / [(1.25)2(1.15)1]+ 14.67 / [(1.25)2(1.15)2] + 18.08 / [(1.25)2(1.15)3] + 20.62 / [(1.25)2(1.15)4] + 21.89 / [(1.25)2(1.15)5] + 475.80 / [(1.25)2(1.15)5] =
4.07 + 4.88 + 6.13 + 7.10 + 7.61 + 7.55 + 6.97 + 151.40 = 195.71
