(Chapter 13) Please answer all questions with a red X next to them. Thank you!

Estimating Sharo Value Using the DCF Modal Following are forecasts of sales, net operating proft after tax (NOPAT), and net operating assers (NOA) as of Fabruary 26, 2011, for Best Buy, Inc. Assume Reported Horizon Peried in milliansi 2011 2012 2013 2014 2015 Terminel Period $40,023 sas577 140653 %55100 $61,592 4481,628 17772009 2226 287 5916545 722101 62.20 NOPAT Answer the following requirements assuming a discount rate (WACC) of 1 1%, a terminal period growth rate of 1%, common shares outstanding of 410.5 milion, net nonoperating obligations (NNO) of $787 million and noncontroling interest (NCI) on the balance sheet of $690 million. (a) Estimate the value of a share of Best Buy's common stock using the discounted cash flow (DCF) model as of February 26, 2011. Round your answers to re nearest whole number except for the disc unt factors, shares outstanding. and the stock price per share. Round the discount factors to five decimal places, shares outstanding to one decimal place, and the stock price to two decimal places . Use your rounded answers for subsequent calculations Do not use negative signs with any of your answers beloww. Herizon Period in millions) 2011 2012 2013 2014 2015 7 13 crease in NOA CFF (NOPAT Increase in ,123 1,407 2.152 round decimal places Discount lacto[1/(14w%) Present value of horiaon Cum present value of honors FCF Present value of termina Total em value NNO Firm equity value hares cuestanding round one decimal placel x ound t Suock price per share (b) Assume Best Buy (BBY) stock closed at $43.47 on April 1. 2011. How does your valuation estimate compare with this closing price? What do you believe are some reazons for the difference? Stock prices are a function of many factors. It is impossible to speculate on the reazons for the Our stock price estimato is lower than the BBY marker price, indicating that we baliave tha: BBY stock is undervalued. Stock prices are a function of expected NOPAT and NOA as well as the WACC discount rate. Our lower stock price estimate might be due to more optimistic forocasts or a lower discount rate compared to other investors and analysts' model assumptions. Our stock price estimace is lower than the BBY market price, indicating that we beliove tha: BBY stock is overvalued. Stock prices are a function of expected NOPAT and NOA, as well as the WACC discount race. Our lower stock price estimate might be due to more optimistic forecasts or a lower discount rate compared to other investors and analysts' model assumptions. Our stock price estimace is lower than the BBY marike price, indicating that we beliave tha: BBY stock is overvalued. Stock prices are a function of expected NOPAT and NOA, as well as the WACC discount race. Our lower stock price estimate might be due to more pessimistic forecasts or a higher discount rate compared to other investors and analysts' model assumptions.v Estimating Sharo Value Using the DCF Modal Following are forecasts of sales, net operating proft after tax (NOPAT), and net operating assers (NOA) as of Fabruary 26, 2011, for Best Buy, Inc. Assume Reported Horizon Peried in milliansi 2011 2012 2013 2014 2015 Terminel Period $40,023 sas577 140653 %55100 $61,592 4481,628 17772009 2226 287 5916545 722101 62.20 NOPAT Answer the following requirements assuming a discount rate (WACC) of 1 1%, a terminal period growth rate of 1%, common shares outstanding of 410.5 milion, net nonoperating obligations (NNO) of $787 million and noncontroling interest (NCI) on the balance sheet of $690 million. (a) Estimate the value of a share of Best Buy's common stock using the discounted cash flow (DCF) model as of February 26, 2011. Round your answers to re nearest whole number except for the disc unt factors, shares outstanding. and the stock price per share. Round the discount factors to five decimal places, shares outstanding to one decimal place, and the stock price to two decimal places . Use your rounded answers for subsequent calculations Do not use negative signs with any of your answers beloww. Herizon Period in millions) 2011 2012 2013 2014 2015 7 13 crease in NOA CFF (NOPAT Increase in ,123 1,407 2.152 round decimal places Discount lacto[1/(14w%) Present value of horiaon Cum present value of honors FCF Present value of termina Total em value NNO Firm equity value hares cuestanding round one decimal placel x ound t Suock price per share (b) Assume Best Buy (BBY) stock closed at $43.47 on April 1. 2011. How does your valuation estimate compare with this closing price? What do you believe are some reazons for the difference? Stock prices are a function of many factors. It is impossible to speculate on the reazons for the Our stock price estimato is lower than the BBY marker price, indicating that we baliave tha: BBY stock is undervalued. Stock prices are a function of expected NOPAT and NOA as well as the WACC discount rate. Our lower stock price estimate might be due to more optimistic forocasts or a lower discount rate compared to other investors and analysts' model assumptions. Our stock price estimace is lower than the BBY market price, indicating that we beliove tha: BBY stock is overvalued. Stock prices are a function of expected NOPAT and NOA, as well as the WACC discount race. Our lower stock price estimate might be due to more optimistic forecasts or a lower discount rate compared to other investors and analysts' model assumptions. Our stock price estimace is lower than the BBY marike price, indicating that we beliave tha: BBY stock is overvalued. Stock prices are a function of expected NOPAT and NOA, as well as the WACC discount race. Our lower stock price estimate might be due to more pessimistic forecasts or a higher discount rate compared to other investors and analysts' model assumptions.v