Assume following are forecasts of Abercrombie & Fitch's sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of January 29, 2011. Refer to the information in the table to answer the following requirements. Reported Horizon Period (In millions) 2011 2012 2013 2014 2015 Terminal Period Sales $3,750 $4,500 $5,400 $ 6,480 $ 7,776 NOPAT 464 581 679 815 957 NOA 1,350 1,624 1,922 2,306 2,798 2,796 $7,853 978 Answer the following requirements assuming a discount rate (WACC) of 13.3%, a terminal period growth rate of 1%, common shares outstanding of 86.2 million, and net nonoperating obligations (NNO) of $(288) million (negative NNO reflects net nonoperating assets such as investments rather than net obligations). (a) Estimate the value of a share of Abercrombie & Fitch common stock using the residual operating income (ROPI) model as of January 29, 2011, Rounding instructions: Round answers to the nearest whole number unless noted otherwise. Use your rounded answers for subsequent calculations. Horizon Period 2013 5,400 x 679 X 1,922 X 2014 6,480 x 2015 7,776 x 957 x Terminal Period 606 815 X 2,306 x 2,798 X Do not use negative signs with any of your answers. Reported (In millions) 2011 2012 ROPI (NOPAT - [NOABeg x rw]) 365 x Discount factor [1/(1+rwit] (Round5 decimal places) 0.88 X Present value of horizon ROPI 322 x Cum present value of horizon ROPI $ 1,494.25 Present value of terminal ROPI 2,990 NOA 1,350 Total firm value 4,631 X NNO 288 Firm equity value $ 4,343 x Shares outstanding (millions) 86.2 (round one decimal place) Stock price per share $ 50 X (round two decimal places) > > > > > Assume following are forecasts of Abercrombie & Fitch's sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of January 29, 2011. Refer to the information in the table to answer the following requirements. Reported Horizon Period (In millions) 2011 2012 2013 2014 2015 Terminal Period Sales $3,750 $4,500 $5,400 $ 6,480 $ 7,776 NOPAT 464 581 679 815 957 NOA 1,350 1,624 1,922 2,306 2,798 2,796 $7,853 978 Answer the following requirements assuming a discount rate (WACC) of 13.3%, a terminal period growth rate of 1%, common shares outstanding of 86.2 million, and net nonoperating obligations (NNO) of $(288) million (negative NNO reflects net nonoperating assets such as investments rather than net obligations). (a) Estimate the value of a share of Abercrombie & Fitch common stock using the residual operating income (ROPI) model as of January 29, 2011, Rounding instructions: Round answers to the nearest whole number unless noted otherwise. Use your rounded answers for subsequent calculations. Horizon Period 2013 5,400 x 679 X 1,922 X 2014 6,480 x 2015 7,776 x 957 x Terminal Period 606 815 X 2,306 x 2,798 X Do not use negative signs with any of your answers. Reported (In millions) 2011 2012 ROPI (NOPAT - [NOABeg x rw]) 365 x Discount factor [1/(1+rwit] (Round5 decimal places) 0.88 X Present value of horizon ROPI 322 x Cum present value of horizon ROPI $ 1,494.25 Present value of terminal ROPI 2,990 NOA 1,350 Total firm value 4,631 X NNO 288 Firm equity value $ 4,343 x Shares outstanding (millions) 86.2 (round one decimal place) Stock price per share $ 50 X (round two decimal places) > > > > >
