Estimating Share Value Using the ROPI Model Following are forecasted sales, NOPAT, and NOA for Colgate-Palmolive Company for 2019 through 2022. Colgate Palmolive (CL) Reported $ millions Sales NOPAT NOA 2018 515,544 2,737 5,837 Forecast Horizon Period 2019 2020 2021 2022 $16.010 $16,491 $16,985 $17.495 2.518 2902 2,989 3.079 6,012 6,193 6,378 6,573 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. Terminal period sales $ Terminal period NCPAT S Terminal period NCA 176470 23.110 6.036 b. Estimate the value of a share of Colgate-Palmolive common stock using the residual operating income (ROP) model. Assume a discount rate (WACC) of 5.70%, common shares outstanding of 862.9 million, net nonoperating obligations (NNO) of $5,640 million, and noncontrolling interest (NCI) from the balance sheet of $299 million. Note: Round answers to two decimal places. $ 64.41 Colgate-Palmolive stock closed at $66.70 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? Stock price is overvalued d. The forecasts assumed a terminal growth rate of 1%. If the terminal growth rate had been 25%, what would the estimated stock price have been? Note: Round answers to two decimal places. $ 92.54 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%). 5.51 56 Check Estimating Share Value Using the ROPI Model Following are forecasted sales, NOPAT, and NOA for Colgate-Palmolive Company for 2019 through 2022. Colgate Palmolive (CL) Reported $ millions Sales NOPAT NOA 2018 515,544 2,737 5,837 Forecast Horizon Period 2019 2020 2021 2022 $16.010 $16,491 $16,985 $17.495 2.518 2902 2,989 3.079 6,012 6,193 6,378 6,573 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. Terminal period sales $ Terminal period NCPAT S Terminal period NCA 176470 23.110 6.036 b. Estimate the value of a share of Colgate-Palmolive common stock using the residual operating income (ROP) model. Assume a discount rate (WACC) of 5.70%, common shares outstanding of 862.9 million, net nonoperating obligations (NNO) of $5,640 million, and noncontrolling interest (NCI) from the balance sheet of $299 million. Note: Round answers to two decimal places. $ 64.41 Colgate-Palmolive stock closed at $66.70 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? Stock price is overvalued d. The forecasts assumed a terminal growth rate of 1%. If the terminal growth rate had been 25%, what would the estimated stock price have been? Note: Round answers to two decimal places. $ 92.54 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%). 5.51 56 Check