Question
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
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 | $108,203 | $115,777 | $123,882 | $132,553 | $141,832 | $144,669 |
| NOPAT | 12,073 | 12,967 | 13,875 | 14,846 | 15,885 | 16,203 |
| NOA | 25,546 | 27,332 | 29,245 | 31,292 | 33,483 | 34,152 |
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 $27,424 million. a. Estimate the value of a share of Home Depot common stock using the residual operating income (ROPI) model as of February 3, 2019. Note: Do not round until your final answer; round your final answer to two decimal places
The answer is not 237.07 and 244.99
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Financial Accounting For MBAs
Authors: Peter D. Easton, John J. Wild, Robert F. Halsey, Mary Lea McAnally
4th Edition
9781934319345
