Following are forecasts of Baker Company's sales, net operating profit after tax (NOPAT), and net

operating assets (NOA) as of January 31, 2013.

Horizon Period

(in

millions)

Reported

2013

2014

2015

2016

2017

Terminal

Period

Sales

$2,785

$3,838

$5,289

$7,288

$10,043

$10,244

NOPAT

330

455

627

864

1,190

1,214

NOA

533

735

1,012

1,395

1,922

1,961

Assuming a terminal period growth rate of 2%, a discount rate (WACC) of 13%, common shares

outstanding of 103.3 million, and net nonoperating obligations (NNO) of $(462) million (negative NNO

reflects net investments rather than net obligations), estimate the value of a share of Baker common

stock using the residual operating income (ROPI) model as of January 31, 2013.

a. $79.90

b. $78.27

c.

$74.32

d. $69.78