Estimating Share Value Using the ROPI Model

Following are forecasts of ilinois Tool Works inc, sales, net operating profit after tax $($NOPAT$),$ and net operating assets $($NOA$)$ as of December $31,2018.$ 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.

$\backslash$table$[[,$Reported,Formenst Horizon Period,Hermin$],[5$

millions $,2018,2019,2020,2021,202,$Herita$],[$Sales$,$$$14,768,$$$15,654,$$$16,593,$$$17,589,$$$18,644,$$$19017],[$NOPAT$,2\mathrm{.}711,2,880,3,053,3,236,3,430,3,499],[$NOA$,9,462,10,028,10,630,11,268,11,944,12,188]]$

Answer the following requirements with the following assumptions:

$\backslash$table$[[,,],[$Terminal period growth rate,$2\%,],[$Discount rate $($WhCC$),7\mathrm{.}35\%,],[$Common shares outstanding,$328\mathrm{.}1,$million$],[$Net nonoperating obligations $($NNO$),$$$6,204,$million$]]$

$($a$)$ Estimate the value of a share of ITW's common stock using the residual operating income model $($ROPI$)$ model as of December $31,2018.$

$($b$)$ Illinois Tool Works inc. closed at $$144\mathrm{.}21$ on February $15,2019,$ the date the $10-K$ was filed with the SEC. How does your valuation estimate compare with this closing price?