Colgate$-$Palmolive Company is an American multinational consumer products company headquartered on Park Avenue in Midtown Manhattan, New York City. The company specializes in the production, distribution, and provision of household, health care, personal care, and veterinary products. Colgate has numerous subsidiary organizations spanning $200$ countries. Assuming that now is $2018$ and you have been given the following forecasted sales, NOPAT, and NOA for Colgate for the next four years.

Colgate Palmolive Reported Forecast Horizon Period $20182019202020212022$ Sales $$15,544$ $$16,010$ $$16,491$ $$16985$ $$17,495$

NOPAT $2,7372,8182,9022,9893,079$

NOA $5,8376,0126,1936,3786,570$

Questions:

a$.$ Forecast the terminal period values assuming a $1\%$ terminal period growth for all three model

inputs, that is Sales, NOPAT, and NOA.

b$.$ Estimate the value of a share of Colgate$-$Palmolive common stock using the discounted cash

flow $($DCF$)$ model; assume a discount rate $($WACC$)$ of $5\mathrm{.}7\%,$ common shares outstanding of

$862\mathrm{.}9$ million, net nonoperating obligations $($NNO$)$ of $$5,640$ million, and noncontrolling

interest $($NCI$)$ from the balance sheet of $$299$ million.

c$.$ Colgate$-$Palmolive$$s stock closed at $$66\mathrm{.}70$ on February $21,2019,$ the date the Form $10-$K

was filed with the SEC. How does your valuation estimate compare with this closing price?

What do you believe are some reasons for the difference?

d$.$ The forecasts you completed assumed a terminal growth rate of $1\%.$ What if the terminal rate

had been $2\%?$ What would your estimated stock price have been?