Estimating Share Value Using the DCF Model Following are forecasts of sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of February 26, 2011, for Best Buy, Inc. (In millions) Sales NOPAT NOA Assume Reported Horizon Period 2011 2012 2013 2014 2015 $50,272 $52,786 $55,425 $58,196 $61,106 1,389 1,584 1,663 1,746 1,833 7,876 8,248 8,660 9,093 9,548 Terminal Period $61,717 1,852 9,643 Answer the following requirements assuming a discount rate (WACC) of 11%, a terminal period growth rate of 1%, common shares outstanding of 392.6 million, net nonoperating obligations (NNO) of $1,274 million and noncontrolling 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. Rounding instructions: Round your answers to the nearest whole number except for the discount 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 below. Horizon Period 2013 412 1,251 0.81162 1,015 2014 433 1,313 0.73119 960 2015 455 1,378 0.65873 908 Terminal Period 95 1,757 Assume Reported (In millions) 2011 2012 Increase in NOA 372 FCFF (NOPAT - Increase in NOA) 1,212 Discount factor [1/(1+rw)t] (round 5 decimal places) 0.9009 Present value of horizon FCFF 1,092 Cum present value of horizon FCFF $ 3,975 Present value of terminal FCFF 14,390 x Total firm value 0 x NNO 0 x NCI OX Firm equity value Ox Shares outstanding (millions) Ox (round one decimal place) Stock price per share 0 x (round two decimal places)