in 2017, bmc software generated $465m of operating income (earnings before interest and taxes) and $295m of net income from $2,200m of sales. over the next two years (2018 and 2019), the firm is projecting 10% growth in operating income and 5% growth in depreciation expense. beginning in 2020, bmc estimates that free cash flows will grow 2%. assume the firm’s effective tax rate is 30%, weighted average cost of capital is 9%, and number of shares outstanding is 146m. depreciation expense for 2017 was $105m while capital expenditures were $55m. capital expenditures are expected to remain constant over the next 5 years. bmc expects working capital needs to increase by $20m per year. lastly, the firm has $250m in cash and cash equilavents and $750m of interest bearing debt. what is the free cash flow projection for 2019?
