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Estimating Share Value Using the ROPI Model Following are forecasted sales, NOPAT, and NOA for Colgate-Palmolive Company for 2019 through 2022. a. Forecast the terminal
Estimating Share Value Using the ROPI Model Following are forecasted sales, NOPAT, and NOA for Colgate-Palmolive Company for 2019 through 2022. a. Forecast the terminal period values for Sales, NOPAT, and NOA, assuming a 1% terminal period growth rate. Note: Round answers to the nearest dollar. b. Estimate the value of a share of Colgate-Palmolive common stock using the residual operating income (ROPI) model. Assume a discount rate (WACC) of 5.70\%, common shares outstanding of 862.9 million, net nonoperating obligations (NNO) of $5,358 million, and noncontrolling interest (NCl) from the balance sheet of $284 million. Note: Round answers to two decimal places. $x c. Colgate-Palmolive stock closed at $63.37 on February 21,2019 , the date the Form 10-K was filed with the SEC. How does your valuation estimate compare with this closing price? d. The forecasts assumed a terminal growth rate of 1%. If the terminal growth rate had been 2%, what would the estimated stock price have been? Note: Round answers to two decimal places. $x e. What would WACC need to be to warrant the actual stock price on February 21, 2019? Note: Round answer to two decimal places (for example, 0.0674533=6.75% ). %
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