Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

(In millions) Sales NOPAT NOA Assume Reported Horizon Period 2011 2012 2013 2014 2015 $50,272 $52,786 $55,425 $58,196 $61,106 1,584 1,663 1,746 1,833 7,876 8,248

image text in transcribed

(In millions) Sales NOPAT NOA Assume Reported Horizon Period 2011 2012 2013 2014 2015 $50,272 $52,786 $55,425 $58,196 $61,106 1,584 1,663 1,746 1,833 7,876 8,248 8,660 9,093 9,548 Terminal Period $61,717 1,852 9,643 1,389 Answer the following requirements assuming a discount rate (WACC) of 11%, a terminal period growth rate of 1%, common shares outstanding of 392.6 million, net nonoperating obligations (NNO) of $1,274 million and noncontrolling interest (NCI) on the balance sheet of $690 million. (a) Estimate the value of a share of Best Buy's common stock using the discounted cash flow (DCF) model as of February 26, 2011. Rounding instructions: Round your answers to the nearest whole number except for the discount factors, shares outstanding, and the stock price per share. Round the discount factors to five decimal places, shares outstanding to one decimal place, and the stock price to two decimal places. Use your rounded answers for subsequent calculations. Horizon Period 2013 2015 Terminal Period 0x OX 2014 OX OX 0 X 0 x OX 0X OX 0 x OX 0 X 0 X OX Do not use negative signs with any of your answers below. Assume Reported (In millions) 2011 2012 Increase in NOA OX FCFF (NOPAT - Increase in NOA) OX Discount factor [1/(1+rw)t] (round 5 decimal places) OX Present value of horizon FCFF 0 X Cum present value of horizon FCFF $ 0 x Present value of terminal FCFF 0 X Total firm value 0 x NNO 0 X NCI 0 x Firm equity value $ OX Shares outstanding (millions) 0x (round one decimal place) Stock price per share $ 0x (round two decimal places)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

What are the purposes of promotion ?

Answered: 1 week ago