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Estimating Share Value Using the DCF Model Following are forecasted sales, NOPAT, and NOA for AT&T for 2 0 1 9 through 2 0 2
Estimating Share Value Using the DCF Model Following are forecasted sales, NOPAT, and NOA for AT&T for through Note: Complete the entire question in Excel and format each answer to two decimal places. Then enter the answers into the provided spaces below with two decimal places. a Forecast the terminal period values assuming the following terminal period growth rate. Assumption Terminal period growth rate Reported Forecast Horizon Period Terminal $ millions Period Sales $ $ $ $ $ Answer NOPAT Answer NOA Answer b Estimate the value of a share of AT&T common stock using the discounted cash flow DCF model as of December using the following assumptions and the information above. Assumptions Discount rate WACC Common shares outstanding million Net nonoperating obligations NNO $ million Noncontrolling interest $ million Reported Forecast Horizon Terminal $ millions Period Increase in NOA Answer Answer Answer Answer Answer FCFF NOPAT Increase in NOA Answer Answer Answer Answer Answer Present value of horizon FCFF Answer Answer Answer Answer Cum. present value of horizon FCFF Answer Present value of terminal FCFF Answer Total firm value Answer Less plus NNO Answer Less NCI Answer Firm equity value Answer Shares outstanding millions Answer Stock price per share Answer c AT&T closed at $ on February the date the Form K was filed with the SEC. How does your valuation estimate compare with this closing price? Answer Higher d If WACC has been what would the valuation estimate have been? Value Answer What about if WACC has been Value Answer
Estimating Share Value Using the DCF Model
Following are forecasted sales, NOPAT, and NOA for AT&T for through
Note: Complete the entire question in Excel and format each answer to two decimal places. Then enter the answers into the provided spaces below with two decimal places.
a Forecast the terminal period values assuming the following terminal period growth rate.
Assumption
Terminal period growth rate
Reported Forecast Horizon Period Terminal
$ millions Period
Sales $ $ $ $ $ Answer
NOPAT Answer
NOA Answer
b Estimate the value of a share of AT&T common stock using the discounted cash flow DCF model as of December using the following assumptions and the information above.
Assumptions
Discount rate WACC
Common shares outstanding million
Net nonoperating obligations NNO $ million
Noncontrolling interest $ million
Reported Forecast Horizon Terminal
$ millions Period
Increase in NOA Answer
Answer
Answer
Answer
Answer
FCFF NOPAT Increase in NOA Answer
Answer
Answer
Answer
Answer
Present value of horizon FCFF Answer
Answer
Answer
Answer
Cum. present value of horizon FCFF Answer
Present value of terminal FCFF Answer
Total firm value Answer
Less plus NNO Answer
Less NCI Answer
Firm equity value Answer
Shares outstanding millions Answer
Stock price per share Answer
c AT&T closed at $ on February the date the Form K was filed with the SEC. How does your valuation estimate compare with this closing price?
Answer
Higher
d If WACC has been what would the valuation estimate have been?
Value
Answer
What about if WACC has been
Value
Answer
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