Question
Following are forecasts of sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of January 31, 2013, for Wal-Mart Stores, Inc.
Following are forecasts of sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of January 31, 2013, for Wal-Mart Stores, Inc. Refer to the information in the table to answer the following requirements.
Reported | Horizon Period | |||||
---|---|---|---|---|---|---|
(In millions) | 2013 | 2014 | 2015 | 2016 | 2017 | Terminal Period |
Sales | $469,162 | $492,620 | $517,251 | $543,114 | $570,269 | $575,972 |
NOPAT | 19,056 | 20,197 | 21,207 | 22,268 | 23,381 | 23,615 |
NOA | 128,612 | 134,964 | 141,713 | 148,798 | 156,238 | 157,801 |
Answer the following requirements assuming a discount rate (WACC) of 7%, a terminal period growth rate of 1%, common shares outstanding of 3,314 million, net nonoperating obligations (NNO) of $46,874 million, and noncontrolling interest (NCI) on the balance sheet of $5,395 million. (a) Estimate the value of a share of Wal-Mart common stock using the residual operating income (ROPI) model as of January 31, 2013. Rounding instructions: Round answers to the nearest whole number unless noted otherwise. Use your rounded answers for subsequent calculations.
Reported | Forcast Horizon | |||||
---|---|---|---|---|---|---|
WMT (In millions) | 2013 | 2014 | 2015 | 2016 | 2017 | Terminal Period |
ROPI (NOPAT - [NOABeg rw]) | Answer | Answer | Answer | Answer | Answer | |
Discount factor [1/(1+rw)t] | (round 5 decimal points) | Answer | Answer | Answer | Answer | |
Present value of horizon ROPI | Answer | Answer | Answer | Answer | ||
Cum present value of horizon ROPI | $Answer | |||||
Present value of terminal ROPI | Answer | |||||
NOA | Answer | |||||
Total firm value | Answer | |||||
Less NNO | Answer | |||||
Less NCI | Answer | |||||
Firm equity value | $Answer | |||||
Shares outstanding (millions) | Answer | |||||
Stock price per share | $Answer | (round two decimal points) |
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