Following are forecasted sales, NOPAT, and NOA for Texas Roadhouse for 2016 through 2019. a. Forecast the terminal period values assuming a 1% terminal period growth rate for all three model inputs: Sales, NOPAT, and NOA. Round your answers to the nearest dollar. Reported Forecast Horizon Terminal $ thousands 2015 2016 2017 2018 2019 Period Sales $1,807,368 $2,078,473 $2,390,244 $2,581,464 $2,787,981 Answer NOPAT 102,495 170,435 196,000 211,680 228,614 Answer NOA 662,502 761,904 876,189 946,284 1,021,987 Answer b. Estimate the value of a share of TXRH common stock using the discounted cash flow (DCF) model as of December 29, 2015; assume a discount rate (WACC) of 7%, common shares outstanding of 70,091 thousand, net nonoperating obligations (NNO) of $(14,680) thousand, and noncontrolling interest (NCI) from the balance sheet of $7,520 thousand. Note that NNO is negative because the company’s cash exceeds its nonoperating liabilities. Rounding instructions: Use rounded answers for subsequent computations. Round answers to the nearest whole number unless otherwise noted. Round discount factor to 5 decimal places and stock price per share to two decimal places. Use a negative sign with your negative NNO answer. Otherwise, do not use negative signs with your answers. TXRH Forecast Horizon Terminal $ thousands 2016 2017 2018 2019 Period Increase in NOA Answer Answer Answer Answer Answer FCFF (NOPAT - Increase in NOA) Answer Answer Answer Answer Answer Discount factor [1 / (1 + rw)t ] Answer Answer Answer Answer Present value of horizon FCFF Answer Answer Answer Answer Cum PV of horizon FCFF Answer Present value of terminal FCFF Answer Total firm value Answer NNO Answer NCI Answer Firm equity value Answer Shares outstanding (thousands) Answer Stock price per share Answer

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Estimating Share Value Using the DCF Model

Following are forecasted sales, NOPAT, and NOA for Texas Roadhouse for 2016 through 2019.

a. Forecast the terminal period values assuming a 1% terminal period growth rate for all three model inputs: Sales, NOPAT, and NOA.

Round your answers to the nearest dollar.

	Reported	Forecast Horizon	Terminal
$ thousands	2015	2016	2017	2018	2019	Period
Sales	$1,807,368	$2,078,473	$2,390,244	$2,581,464	$2,787,981	Answer
NOPAT	102,495	170,435	196,000	211,680	228,614	Answer
NOA	662,502	761,904	876,189	946,284	1,021,987	Answer

b. Estimate the value of a share of TXRH common stock using the discounted cash flow (DCF) model as of December 29, 2015; assume a discount rate (WACC) of 7%, common shares outstanding of 70,091 thousand, net nonoperating obligations (NNO) of $(14,680) thousand, and noncontrolling interest (NCI) from the balance sheet of $7,520 thousand. Note that NNO is negative because the company’s cash exceeds its nonoperating liabilities.

Rounding instructions:

Use rounded answers for subsequent computations.
Round answers to the nearest whole number unless otherwise noted.
Round discount factor to 5 decimal places and stock price per share to two decimal places.
Use a negative sign with your negative NNO answer. Otherwise, do not use negative signs with your answers.

TXRH				Forecast Horizon		Terminal
$ thousands		2016	2017	2018	2019	Period
Increase in NOA		Answer	Answer	Answer	Answer	Answer
FCFF (NOPAT - Increase in NOA)		Answer	Answer	Answer	Answer	Answer
Discount factor [1 / (1 + rw)t ]		Answer	Answer	Answer	Answer
Present value of horizon FCFF		Answer	Answer	Answer	Answer
Cum PV of horizon FCFF	Answer
Present value of terminal FCFF	Answer
Total firm value	Answer
NNO	Answer
NCI	Answer
Firm equity value	Answer
Shares outstanding (thousands)	Answer
Stock price per share	Answer