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please fix Estimating Share Value Using the DCF Model Following are forecasts of sales, net operating profit after tax (NOPAT), and net operating assets (NOA)
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Estimating Share Value Using the DCF Model Following are forecasts of sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of February 26, 2011, for Best Buy, Inc. Assume Reported Horizon Period (In millions) 2011 2012 2013 2014 2015 Terminal Period Sales $40,023 544,577 $49,650 $55,300 $61,592 $62,200 NOPAT 1,448 1,628 1,777 2,226 2,265 NOA 5,287 5,891 6,545 7.282 8,101 8,214 2,009 Answer the following requirements assuming a discount rate (WACC) of 11%, a terminal period growth rate of 1%, common shares outstanding of 410.5 million, net nonoperating obligations (NNO) of $787 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, 2012 Horizon Period 2013 654 Terminal Period 113 604 1,024 0.9009 1,123 Do not use negative signs with any of your answers below, Assume Reported (In millions) 2011 Increase in NOA FCFF (NOPAT - Increase in NOA) Discount factor [1/1-rwyt! (round 5 decimal places) Present value of horizon FCFF Cum present value of horizon FCFF $ 3,690.88 X Present value of terminal FCFF 14,317.65 X Total firm value 18,008.53 x NNO 787 2014 737 1,272 0.73119 930.08 X 2015 819 1,407 0.65873 926.83 x 2,152 0.81162 911.45 x 922.52 X NCI OX $ Firm equity value Shares outstanding (millions) Stock price per share 17,221.53 x 410.5 (round one decimal place) 41.95 x (round two decimal places) $Step by Step Solution
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