Given the 2019 actual sales by segment, provide a sales bridge to 2020 forecasted sales if expected volume increase is 3.3% across the board, sales of new products in Flavor of the Month in the amount of 325K, a 500K shift in sales from Strawberry to Vanilla and an overall realized price increase of 1% across the board.

2019 Act Sales (in millions)

Chocolate

14,396

Vanilla

9,865

Chocolate Chip

8,576

Strawberry

4,965

Flavor of the Month

2,459

Total Actual Sales

40,261

Following are forecasts of sales, NOPAT, NOA as of 12/31/20 for Day-Brite. Assuming a WACC of 6.5%, terminal growth rate of 1%, common shares outstanding of 145.5M, and NNO of $6.2M

Estimate the value of a share of Day-Brites common stock using the DCF method as of 12/31/20.

Day-Brite stock closed at $425.50 on 2/21/19, the date the 10-K was filed with the SEC. How does your valuation estimate compare with this closing price? What action might you take?

Forecast 2020 Actual $ millions 2021 2022 2023 Terminal Period 2024 Sales 54,806 55,629 56,463 57,310 58,169 58,751 NOPAT 2,400 2,448 2,485 2,522 2,560 2,585 NOA 3,883 3,945 4,004 4,065 4,125 4,167 Forecast 2020 Actual $ millions 2021 2022 2023 Terminal Period 2024 Sales 54,806 55,629 56,463 57,310 58,169 58,751 NOPAT 2,400 2,448 2,485 2,522 2,560 2,585 NOA 3,883 3,945 4,004 4,065 4,125 4,167