Following are forecasts of Home Depot's sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of February 3, 2019, which the company labels fiscal 2018 S millions Sales NOPAT NOA Forecast Horizon Period Terminal Period 2019 Reported 2018 2020 2021 2022 $125,515 $134,301 $143,703 $153,761 $164,525 $167,816 14,005 15,042 16,095 17,221 18,427 18,795 31,705 33,924 36,299 38,840 39,616 29,633 Answer the following requirements assuming a discount rate (WACC) of 7.85%, a terminal period growth rate of 2%, common shares outstanding of 1,105 million, net nonoperating obligations (NNO) of $31,812 million. Required a. Estimate the value of a share of Home Depot's common stock using the discounted cash flow (DCF) model as of February 3, 2019. Note: Do not round a I your final answer; round your final answer to two decimal places. Stock price per share: $ b. Home Depot stock closed at $220.47 on March 28, 2019, the date the Form 10-K was filed with the SEC. How does your valuation estimate compare with this closing price?
Following are forecasts of Home Depot's sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of February 3, 2019, which the company labels fiscal 2018 S millions Sales NOPAT NOA Forecast Horizon Period Terminal Period 2019 Reported 2018 2020 2021 2022 $125,515 $134,301 $143,703 $153,761 $164,525 $167,816 14,005 15,042 16,095 17,221 18,427 18,795 31,705 33,924 36,299 38,840 39,616 29,633 Answer the following requirements assuming a discount rate (WACC) of 7.85%, a terminal period growth rate of 2%, common shares outstanding of 1,105 million, net nonoperating obligations (NNO) of $31,812 million. Required a. Estimate the value of a share of Home Depot's common stock using the discounted cash flow (DCF) model as of February 3, 2019. Note: Do not round a I your final answer; round your final answer to two decimal places. Stock price per share: $ b. Home Depot stock closed at $220.47 on March 28, 2019, the date the Form 10-K was filed with the SEC. How does your valuation estimate compare with this closing price?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Following are forecasts of Home Depot's sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of February 3, 2019, which the
company labels fiscal 2018
S millions
Sales
NOPAT
NOA
Forecast Horizon Period
Terminal
Period
2021
Reported
2018 2019 2020
2022
$125,515 $134,301 $143,703 $153,761 $164,525 $167,816
14,005 15,042 16,095 17,221 18,427
29,633 31,705 33,924 36,299 38,840
18,795
39,616
Answer the following requirements assuming a discount rate (WACC) of 7.85%, a terminal period growth rate of 2%, common shares outstanding of 1,105
million, net nonoperating obligations (NNO) of $31,812 million.
Required
a Estimate the value of a share of Home Depot's common stock using the discounted cash flow (DCF) model as of February 3, 2019.
Note: Do not round until your final answer; round your final answer to two decimal places.
Stock price per share: s
b. Home Depot stock closed at $220.47 on March 28, 2019, the date the Form 10-K was filed with the SEC. How does your valuation estimate compare with
this closing price?
•
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