Sales ($ millions) NOPAT = Forecasted sales x NOPM assumption NOA = Forecasted sales / NOAT...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Sales ($ millions) NOPAT = Forecasted sales x NOPM assumption NOA = Forecasted sales / NOAT assumption $ 2019 2020 Est. 2021 Est. 2022 Est. 2023 Est. Period 56,334 $ 59,150.7 $ 62,108.24 $ 65,213.65 $ 68,474.33 $ 69,159.07 0x 0 x 0x 0 % 0 x 0 * 0x 0x 0 x 0 x 0 x 0 x (d) Estimate the value of a share of Cisco common stock using the residual operating income (ROPI) model as of July 27, 2019; assume a discount rate (WACC) of 7.6%, common shares outstanding of 5,029 million, and net nonoperating obligations (NNO) of $(8,747) million (NNO is negative, which means that Cisco has net nonoperating investments). Assumptions Discount rate (WACC) Common shares outstanding 7.60% 5,029 million Net nonoperating obligations (NNO) $(8,747) million NNO is negative, which means that Cisco has net nonoperating investments Forecast Horizon ($ millions) Reported 2018 2019 2020 2021 2022 Terminal Period ROPI (NOPAT - [NOABeg x rw]) Present value of horizon ROPI $ 0 x $ 0 x $ 0 x $ 0 x $ 0 x 0 x 0 x 0 x 0x Cum present value of horizon ROPI $ Present value of terminal ROPI 0 x 0 x NOA 0 x Total firm value 40,989 x Less NNO (8,747) Firm equity value $ 0 x Shares outstanding (millions) 5,029 Stock price per share $ 1.74 x Sales ($ millions) NOPAT = Forecasted sales x NOPM assumption NOA = Forecasted sales / NOAT assumption $ 2019 2020 Est. 2021 Est. 2022 Est. 2023 Est. Period 56,334 $ 59,150.7 $ 62,108.24 $ 65,213.65 $ 68,474.33 $ 69,159.07 0x 0 x 0x 0 % 0 x 0 * 0x 0x 0 x 0 x 0 x 0 x (d) Estimate the value of a share of Cisco common stock using the residual operating income (ROPI) model as of July 27, 2019; assume a discount rate (WACC) of 7.6%, common shares outstanding of 5,029 million, and net nonoperating obligations (NNO) of $(8,747) million (NNO is negative, which means that Cisco has net nonoperating investments). Assumptions Discount rate (WACC) Common shares outstanding 7.60% 5,029 million Net nonoperating obligations (NNO) $(8,747) million NNO is negative, which means that Cisco has net nonoperating investments Forecast Horizon ($ millions) Reported 2018 2019 2020 2021 2022 Terminal Period ROPI (NOPAT - [NOABeg x rw]) Present value of horizon ROPI $ 0 x $ 0 x $ 0 x $ 0 x $ 0 x 0 x 0 x 0 x 0x Cum present value of horizon ROPI $ Present value of terminal ROPI 0 x 0 x NOA 0 x Total firm value 40,989 x Less NNO (8,747) Firm equity value $ 0 x Shares outstanding (millions) 5,029 Stock price per share $ 1.74 x
Expert Answer:
Posted Date:
Students also viewed these accounting questions
-
Bunkhouse Electronics is a recently incorporated firm that makes electronic entertainment systems. Its earnings and dividends have been growing at a rate of 36.5%, and the current dividend yield is...
-
Forecasting with the Parsimonious Method and Estimating Share Value Using the ROPI Model Following are income statements and balance sheets for Cisco Systems. Cisco Systems Consolidated Statements of...
-
Write the following function in terms of unit step function: f (t) = { 3t, 0
-
1. (a) Label Earth's layers as shown in the diagram below. (1 pt each; 4 pts total) X Y W: X: Y: Z: W (b) Explain how these layers formed (early in Earth's history). (7 pts) Z
-
The Really Cool Clothing Company sells its products through a telephone ordering process. Since business is good, the company is interested in studying the way that sales agents interact with their...
-
Refer to the accompanying frequency distribution. What problem would be created by using classes of 60-120, 120-180, . . . , 300-360?
-
What is the purpose of representations and warranties? What are the limits of such clauses?
-
The following information relates to Armanda Co. for the year 2017. Instructions After analyzing the data, prepare an income statement and an owners equity statement for the year ending December...
-
O Tempo A. Describe the pictures by answering the questions "Como est o tempo?" and "Qual a estao?" a. b. C d. B. In sentences, describe weather conditions that fit the seasons. 1. (Inverno) 2....
-
Define Collective Security. Write elaborately Main Features/Characteristics of Collective Security.
-
1. Create a row array that has the following elements (assign it to a variable named x). 13 * 53, 25 sin 25 14-62' cos 80 129, cos (/10)
-
Use the 4-step process to find the comparative advantage and the gains from specialization and trade. The terms of the trade are each person trades half. How many additional pineapples does Tina...
-
Conduct a meeting with team members A. In this activity, you will be playing the role of the newly appointed marketing manager. Assume that you have given a task by the Career Training management to...
-
Help us to complete our marketing plan. Our marketing plan is about MERALCO (Manila Electric Railroad and Light Company). Assume that you are making a marketing plan for MERALCO Company. Please...
-
Every time we have to make a choice we are faced with an opportunity cost. Using an example in your professional life, identify a situation where you were presented with a choice, the opportunity...
-
Assignments are always based upon the previous week's readings (so that you have time to process them), so if you decide to do your assignments before your weekly reading, that is a sound strategy....
-
Prove that the mean heat capacities C P H and C P S are inherently positive, whether T > T 0 or T < T 0 . Explain why they are well defined for T = T 0 .
-
How can external annual financial accounting statements be used by managers within an organisation?
-
Explain the main purpose of the income statement, cash flow statement and the statement of financial position.
-
What are the benefits of having international financial report standards?
Study smarter with the SolutionInn App