Question
Estimating Share Value Using the DCF Model Following are forecasts of Home Depots sales, net operating profit after tax (NOPAT), and net operating assets (NOA)
Estimating Share Value Using the DCF Model Following are forecasts of Home Depots sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of February 3, 2019, which the company labels fiscal 2018. Forecast Horizon Period Reported Terminal $ millions 2018 2019 2020 2021 2022 Period Sales $Forecast Horizon PeriodReportedTerminal$ millions20182019202020212022PeriodSales$127,680$136,617$146,181$156,413$167,362$170,709NOPAT14,24615,30116,37317,51818,74419,120NOA30,14432,25234,50936,92539,51040,299 Answer the following requirements assuming a discount rate (WACC) of 7.85%, a terminal period growth rate of 2%, common shares outstanding of 1,105 million, net nonoperating obligations (NNO) of $32,360 million.. Required a. Estimate the value of a share of Home Depots common stock using the discounted cash flow (DCF) model as of February 3, 2019. Note: Do not round until your final answer; round your final answer to two decimal places.
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