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. Terminal period growth rate | 2% Reported Forecast Horizon Period Terminal 3 millions 2018 2019 2020 2021 2022 Period Sales $170,756 $181,001 $191,861 $203,373 | $215,576 $ 219,888 v NOPAT 20,895 22,082 23,407 24,812| 26,300 26,826 v NOA 369,039 390,931 414,387 | 439,251 465,607 474,919 v 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. Discount rate (WACCQ) 5.70% Common shares outstanding 7,281.6 million Net nonoperating obligations (NNO) $175,155 | million Noncontrolling interest $9,795 million Forecast Reported Horizon Terminal ($ millions) 2018 2019 2020 2021 2022 Period Increase in NOA $ 21,892 ~ $ 23,456 V $ 24,864 - $ 26,356 v $ 9,312 FCFF (NOPAT - Increase in NOA) 190 (49) (52) v (56) 17,514 Present value of horizon FCFF 180 (44) (44.03) (45) Cum. present value of horizon FCFF $ 47 V Present value of terminal FCFF 379,730.71 x Total firm value 379,730 x Less (plus) NNO 175,155 Less NCI 9,795 Firm equity value $ 7,281.6 X Shares outstanding (millions) 7,281.6 Stock price per share $ 28 X c. AT&T closed at $30.85 on February 20, 2019, the date the Form 10-K was filed with the SEC. How does your valuation estimate compare with this closing price? Higher d. If WACC has been 6.2%, what would the valuation estimate have been? Value $ 10 x What about if WACC has been 5.2%? Value $ 10 xForecast Reported Horizon Terminal ($ millions) 2018 2019 2020 2021 2022 Period Increase in NOA $ 21,892 ~ $ 23,456 V $ 24,864 - $ 26,356 ~ $ 9,312 V FCFF (NOPAT - Increase in NOA) 190 (49) (52) v (56) 17,514 V Present value of horizon FCFF 180 (44) (44.03) (45) Cum. present value of horizon FCFF $ 47 Present value of terminal FCFF 379,730.71 x Total firm value 379,777.71 X Less (plus) NNO 175,155 Less NCI 9,795 Firm equity value $ 194,827.71 x Shares outstanding (millions) 7,281.6 Stock price per share $ 26.76 V c. AT&T closed at $30.85 on February 20, 2019, the date the Form 10-K was filed with the SEC. How does your valuation estimate compare with this closing price? Higher + d. If WACC has been 6.2%, what would the valuation estimate have been? Value $ 24.82 X What about if WACC has been 5.2%? Value 29.14 X