17.Following are forecasts of sales, net operating profit after tax (NOPAT), and net operating assets (NOA) its of March 1. 2008. for linatinn in

Answer the following requirements assuming a discount rate (WACC) of \(11 \%\), a terminal period growth rate of \(1 \%\), common shares outstanding of 410.5 million, and net nonoperating obligations (NNO) of \(\$ 792\) million.

a. Estimate the value of a share of Best Buy's common stock using the discounted cash flow (DCF) model as of March 1. 2008.

b. Best Buy (BBY) stock closed at \(\$ 43.47\) on April 1, 2008. How does your valuation estimate compare with this closing price? What do you believe are some reasons for the difference?

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Horizon Period Reported Terminal (In millions) 2008 2009 2010 2011 2012 Period Sales... $40.023 $44,577 $49,650 $55,300 $61,592 $62,208 NOPAT 1,448 1,613 1,797 2,001 2,229 2,251 NOA 5,276 5,876 6,545 7,290 8,119 8,201