Note: Complete the entire question in Excel and format each answer to two decimal places. Then enter the answers into the provided spaces below with two decimal places. Forecast Horizon Period $ millions Sales NOPAT NOA Reported Terminal 2018 2019 2020 2021 2022 Period $56,912 $57,766 $58,632 $59,512 $60,404 $61,008 2,492 2,542 2,580 2,619 2,658 2,684 4,032 4,097 4,158 4,221 4,284 4,327 Answer the following requirements with the following assumptions: Assumptions Terminal period growth rate Discount rate (WACC) 1% 7.8% Common shares outstanding 135.60 million Net nonoperating obligations (NNO) $(6,129) million Noncontrolling interest $0 million NNO is negative because Humana's nonoperating assets exceed its nonoperating liabilities. (a) Estimate the value of a share of Humana's common stock using the discounted cash flow (DCF) model as of December 31, 2018. Forecast Horizon 2020 Terminal Period 2021 61 $ 2,519 ✔ 2,167.64 ✓ ($ millions) Increase in NOA FCFF (NOPAT Increase in NOA) Present value of horizon FCFF Cum. present value of horizon FCFF $ 8,427.29 ✔ Present value of terminal FCFF 29,046.91 x 37,474.67 x Total firm value NNO Firm equity value Shares outstanding (millions) Stock price per share Reported 2018 6,129 x $ 31,345.67 x $ 135.6 ✓ 231.16 x $ 2019 65 $ 2,477 ✔ 2,297.76 ✔ 63 $ 2,556 ✔ 2,040.32 ✓ 2022 63 ✔ $ 2,595 ✓ 1,921.57 ✔ 43 ✔ 2,641✓
Note: Complete the entire question in Excel and format each answer to two decimal places. Then enter the answers into the provided spaces below with two decimal places. Forecast Horizon Period $ millions Sales NOPAT NOA Reported Terminal 2018 2019 2020 2021 2022 Period $56,912 $57,766 $58,632 $59,512 $60,404 $61,008 2,492 2,542 2,580 2,619 2,658 2,684 4,032 4,097 4,158 4,221 4,284 4,327 Answer the following requirements with the following assumptions: Assumptions Terminal period growth rate Discount rate (WACC) 1% 7.8% Common shares outstanding 135.60 million Net nonoperating obligations (NNO) $(6,129) million Noncontrolling interest $0 million NNO is negative because Humana's nonoperating assets exceed its nonoperating liabilities. (a) Estimate the value of a share of Humana's common stock using the discounted cash flow (DCF) model as of December 31, 2018. Forecast Horizon 2020 Terminal Period 2021 61 $ 2,519 ✔ 2,167.64 ✓ ($ millions) Increase in NOA FCFF (NOPAT Increase in NOA) Present value of horizon FCFF Cum. present value of horizon FCFF $ 8,427.29 ✔ Present value of terminal FCFF 29,046.91 x 37,474.67 x Total firm value NNO Firm equity value Shares outstanding (millions) Stock price per share Reported 2018 6,129 x $ 31,345.67 x $ 135.6 ✓ 231.16 x $ 2019 65 $ 2,477 ✔ 2,297.76 ✔ 63 $ 2,556 ✔ 2,040.32 ✓ 2022 63 ✔ $ 2,595 ✓ 1,921.57 ✔ 43 ✔ 2,641✓
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
Related questions
Question
hd.12.
Transcribed Image Text:Note: Complete the entire question in Excel and format each answer to two decimal places. Then enter the answers into the provided spaces below with two decimal places.
Forecast Horizon Period
$ millions
Sales
NOPAT
NOA
Reported
2018 2019 2020 2021 2022
$56,912 $57,766 $58,632 $59,512 $60,404
2,492 2,542 2,580 2,619 2,658
4,032 4,097 4,158 4,221 4,284
Answer the following requirements with the following assumptions:
Assumptions
Terminal period growth rate
1%
Discount rate (WACC)
7.8%
Common shares outstanding
135.60 million
Net nonoperating obligations (NNO) $(6,129) million
Noncontrolling interest
$0 million
NNO is negative because Humana's nonoperating assets exceed its nonoperating liabilities.
(a) Estimate the value of a share of Humana's common stock using the discounted cash flow (DCF) model as of December 31, 2018.
Forecast Horizon
Terminal
Period
($ millions)
Increase in NOA
FCFF (NOPAT - Increase in NOA)
Present value of horizon FCFF
Cum. present value of horizon FCFF
Present value of terminal FCFF
Total firm value
NNO
Firm equity value
Shares outstanding (millions)
Stock price per share
Reported
2018
$ 8,427.29 ✔
29,046.91 x
37,474.67 x
6,129 x
$ 31,345.67 x
$
Terminal
Period
$61,008
2,684
4,327
135.6 ✔
231.16 *
$
2019
65 $
2,477 ✔
2,297.76 ✔
2020
61 $
2,519 ✓
2,167.64 ✔
2021
63 $
2,556 ✔
2,040.32
2022
63
2,595 ✔
1,921.57
$
43 ✔
2,641 ✔
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