E14.2. An SF3 Forecast and a Simple Valuation (Easy) An analyst prepares the following reformulated balance sheet (in millions of dollars): Net operating assets Net financial obligations Common shareholders' equity 2009 2008 $9,682 $9,400 1.987 1,876 $7,695 $7,524 Core operating income (after tax) for 2009 was $990 million. The required return for oper- ations is 9 percent, For ease, use beginning-of-year balance sheet numbers where pertinent in calculations.

a. What was the core return on net operating assets for 2009?

b. Prepare an SF3 forecast of operating income and residual operating income for 2010 based on this financial statement information.

c. Value the equity based on the information.

d. What is the intrinsic enterprise price-to-book ratio?