Question
Following are forecasts of sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of December 31, 2017 for Stellar Stores, Inc.
Following are forecasts of sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of December 31, 2017 for Stellar Stores, Inc.
|
| Horizon Period |
| |||
(in millions) | Reported 2017 | 2018 | 2019 | 2020 | 2021 | Terminal Period |
Sales | $37,006 | $44,777 | $54,180 | $65,558 | $79,325 | $80,912 |
NOPAT | 1,292 | 1,563 | 1,891 | 2,288 | 2,768 | 2,824 |
NOA | 10,007 | 102 | 14,643 | 17,718 | 21,439 | 21,868 |
Assuming a terminal period growth rate of 2%, a discount rate (WACC) of 8%, common shares outstanding of 814.3 million, and net nonoperating obligations (NNO) of $1,676 million, estimate the value of a share of Stellar common stock using the discounted cash flow (DCF) model as of December 31, 2017.
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