Estimating Share Value Using the DCF Model Following are forecasts of sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of December 31, 2018, for Humana 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 Reported Forecast Horizon Period Terminal $ millions 2018 2019 2020 2021 2022 Period Sales $56,912 $57,766 $58,632 $59,512 $60,404 $61,008 NOPAT 2,492 2,542 2,580 2,619 2,658 2,684 NOA 4,032 4,097 4,158 4,221 4,284 4,327 Answer the following requirements with the following assumptions Assumptions Terminal period growth rate 1 Discount rate (WACC) 7 8 Common shares outstanding 135 60 million Net nonoperating obligations (NNO) $(6,129) million Noncontrolling interest $0 million NNO is negative because Humana's nonoperating assets exceed its nonoperating liabilities (a) Estimate the value of a share of Humana's common stock using the discounted cash flow (DCF) model as of December 31, 2018 Reported Forecast Horizon Terminal ($ millions) 2018 2019 2020 2021 2022 Period Increase in NOA Answer 1 Answer 2 Answer 3 Answer 4 Answer 5 FCFF (NOPAT Increase in NOA) Answer 6 Answer 7 Answer 8 Answer 9 Answer 10 Present value of horizon FCFF Answer 11 Answer 12 Answer 13 Answer 14 Cum present value of horizon FCFF Answer 15 Present value of terminal FCFF Answer 16 Total firm value Answer 17 NNO Answer 18 Firm equity value Answer 19 Shares outstanding (millions) Answer 20 Stock price per share Answer 21

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Question: Estimating Share Value Using the DCF Model Following are forecasts of sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of

Estimating Share Value Using the DCF Model

Following are forecasts of sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of December 31, 2018, for Humana.

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.

	Reported	Forecast Horizon Period	Terminal
$ millions	2018	2019	2020	2021	2022	Period
Sales	$56,912	$57,766	$58,632	$59,512	$60,404	$61,008
NOPAT	2,492	2,542	2,580	2,619	2,658	2,684
NOA	4,032	4,097	4,158	4,221	4,284	4,327

Answer the following requirements with the following assumptions:

Assumptions
Terminal period growth rate	1%
Discount rate (WACC)	7.8%
Common shares outstanding	135.60	million
Net nonoperating obligations (NNO)	$(6,129)	million
Noncontrolling interest	$0	million

NNO is negative because Humana's nonoperating assets exceed its nonoperating liabilities.

(a) Estimate the value of a share of Humana's common stock using the discounted cash flow (DCF) model as of December 31, 2018.

	Reported	Forecast Horizon	Terminal
($ millions)	2018	2019	2020	2021	2022	Period
Increase in NOA		Answer 1	Answer 2	Answer 3	Answer 4	Answer 5
FCFF (NOPAT - Increase in NOA)		Answer 6	Answer 7	Answer 8	Answer 9	Answer 10
Present value of horizon FCFF		Answer 11	Answer 12	Answer 13	Answer 14
Cum. present value of horizon FCFF	Answer 15
Present value of terminal FCFF	Answer 16
Total firm value	Answer 17
NNO	Answer 18
Firm equity value	Answer 19
Shares outstanding (millions)	Answer 20
Stock price per share	Answer 21

Question: Estimating Share Value Using the DCF Model Following are forecasts of sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of

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