How will the abnormal profit calculations in Table 8.4 change if the cost of equity assumption is
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How will the abnormal profit calculations in Table 8.4 change if the cost of equity assumption is changed to 10 percent?
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TABLE 8.4 Performance forecasts for Hennes & Mauritz Fiscal year 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Equity valuation (SEK millions) Abnormal profit 15,290.2 17,854.4 20,957.4 20,938.9 20,321.5 19,372.8 18,354.0 17,030.9 15,814.8 13,989.0 Abnormal ROE (%) 25.6 27.6 30.8 29.4 26.5 23.7 21.1 18.6 16.6 14.1 Free cash flow to equity 15,337.5 20,171.6 23,607.3 21,651.6 Abnormal profit growth 2,564.2 3,103.0 -18.6 21,701.6 -617.3 21,501.9 21,218.5 20,778.4 20,399.6 19,541.2 -948.7 -1,018.9 -1,323.0 -1,216.1 -1,825.7 Asset valuation (SEK millions) Abnormal NOPAT 10,560.7 13,142.6 16,192.5 16,142.2 15,365.3 14,298.4 12,975.2 11,367.0 9,895.9 7,845.4 Abnormal RNOA (%) 9.0 10.3 11.9 11.2 9.9 8.6 7.4 6.1 5.1 3.9 Free cash flow from operations 13,455.5 17,351.0 21,119.0 16,472.8 17,142.8 17,715.8 18,006.3 18,360.1 18,753.8 18,878.7 Abnormal NOPAT growth 2,581.9 3,049.9 -50.2 -777.0 -1,066.9 -1,323.2 -1,608.1 -1,471.1 -2,050.6 Present value factors: Equity 0.921 0.848 0.781 0.719 0.662 0.610 0.561 0.517 0.476 0.438 Net operating assets 0.928 0.861 0.798 0.740 0.687 0.637 0.591 0.548 0.509 0.472
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Business Analysis And Valuation
ISBN: 978-1473758421
5th Edition
Authors: Erik Peek, Paul Healy, Krishna Palepu
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