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Estimating Share Value Using the DCF Model Following are forecasts of Home Depot's sales, net operating profit after tax (NOPAT) and net operating assets (NOA)

image text in transcribed Estimating Share Value Using the DCF Model Following are forecasts of Home Depot's sales, net operating profit after tax (NOPAT) and net operating assets (NOA) as of February 3, 2019, which the company labels fiscal 2018 Reported Forecast Horizon Period Terminal 5 millions 2018 2019 2020 2021 2022 Period Sales $125,515 $134.301 $143.703 $153,761 $164,525 $167.816 NOPAT 144005 15.042 16,0951 17.221 18427 18,795 NOA 29.633 31,705 33,924 36,299 38840 39616 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 e of $31,812 million Required a. Estimate the value of a share of Home Depot's 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. Stock price per share: S b. Home Depot stock closed at $220.47 on March 28, 2019, the date the Form 10-K was filed with the SEC. How does your valuation estimate compare with this closing price? Stock price is appropriately valued

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