Question: Estimating Share Value Using the ROPI Model Following are forecasts of Home Depot's sales, net operating profit after tax (NOPAT), and net operating assets

Estimating Share Value Using the ROPI Model Following are forecasts of Home

Estimating Share Value Using the ROPI Model Following are forecasts of Home Depot's sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of February 3, 2019, which the company labels fiscal 2018 Reported 2019 Forecast Horizon Period Terminal millions 2018 2020 2021 2022 Period Sales $102,793 $109,988 $117,688 $125,025 $134,740 $137,436 NOPAT 14,104 15.091 15.393 NOA 24,269 25,965 27,783 29,727 31,809 32444 Answer the following requirements assuming a discount rate (WACC) of 7.85%, a terminal period growth rate of 2%, common shares outstanding of 1.105 million, net nonoperating obligations (NNO) of $26,053 milion a. Estimate the value of a share of Home Depot common stock using the residual operating income (ROP) model as of February 3, 2019 Note: Do not round until your final answer, round your final answer to two decimal places Stock price per share: 0

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!