Estimating Share Value Using the DCF Model Following are forecasts of Abercrombie & Fitch's sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of January 29, 2011. (Current-year NOPAT is lower due to transitory items; we use a longer term estimate for NOPM of 8%.) Reported Horizon Period (In millions) 2011 2012 2013 2014 2015 Sales $3,469 $3,989 $4,587 $5,275 $ 6,066 NOPAT 152 319 367 422 485 NOA 1,032 1,173 1,349 1,551 1,784 Terminal Period $6,187 495 1,820 Answer the following requirements assuming a discount rate (WACC) of 10%, a terminal period growth rate of 2%, common shares outstanding of 87.2 million, and net nonoperating obligations (NNO) of $(858) 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 discounted cash flow (DCF) 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 176 191 0.82645 158 2014 202 220 0.75131 165 2015 233 252 0.68301 172 Terminal Period 36 459 Do not use negative signs with any of your answers. Reported (In millions) 2011 2012 Increase in NOA 141 FCFF (NOPAT - Increase in NOA) 178 Discount factor [1/(1 + rw'] (Round to 5 decimal places) 0.90909 Present value of horizon FCFF 162 Cum present value of horizon FCFF $ 657 Present value of terminal FCFF Ox Total firm value Ox NNO Ox Firm equity value 0 x Shares outstanding (millions) 0x (round one decimal place) Stock price per share 0 x (round two decimal places)