Question: Estimating Share Value Using the DCF Model Following are forecasted sales, NOPAT, and NOA for AT&T for 2019 through 2022 Note: Complete the entire

Estimating Share Value Using the DCF Model Following are forecasted sales, NOPAT, and NOA for AT&T for 2019 through 2022 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. a. Forecast the terminal period values assuming the following terminal period growth rate. Assumption Terminal period growth rate 2% Reported Forecast Horizon Period Terminal millions Sales NOPAT NOA 2018 $173,439 2019 23,578 371,722 2020 2021 2022 $183,684 $194,544 $206,056 $218,259 $ 24,765 26,090 27,495 28,983 393,614 417,070 441,934 468,290 Period 222,624.18 29,562.66 477,655.8 b. Estimate the value of a share of AT&T common stock using the discounted cash flow (DCF) model as of December 31, 2018 using the following assumptions and the information above. Assumptions Discount rate (WACC) Common shares outstanding 5.70% 7,281.6 million Net nonoperating obligations (NNO) $177,838 million Noncontrolling interest $12,478 million Forecast ($ 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 Reported 2018 Horizon Terminal 2019 2020 2021 2022 $ 21,892 $ 2,873 2,718.07 23,456 2,634 2,357.58 $ 24,864 $ 2,631 26,356 2,627 $ Period 9,366 20,197 2,227.9 2,104.55 9,408 747 x Total firm value 555,269 x Less (plus) NNO 177,838 Less NCI 12,478 Firm equity value $ 0 x Shares outstanding (millions) 7,281.6 Stock price per share $ 0 x

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