(h) Estimate the value of a share of Cisco common stock as of July 30, 2016 using the discounted cash flow (DCF) model and the sales forecast in (g); Note, we still assume a discount rate (WACC) of 10%, common shares outstanding of 5,029 million, and net nonoperating obligations (NNO) of $(37,113) million.
(i) Cisco stock closed at $31.47 on September 8, 2016, the date the Form 10-K was filed with the SEC. How does your DCF valuation estimates compare with this closing price? What do you believe are some reasons for the difference? What investment decision is suggested from your results?
(j) Are there other equity valuation models? Please discuss the advantages and disadvantages of different equity valuation models.
 

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compute the return on assets (ROA) and return on equity (ROE) for 2016 Complete the DuPont disaggregation of return on equity (ROE) for 2016. Analyze the DuPont financial ratios and discuss how Cisco Systems Inc. can achieve a high ROE. Compute net operating assets (NOA) for 2016. Compute net operating profit after tax (NOPAT) for 2016, assuming a federal and state statutory tax rate of 37%. (Round your answer to the nearest whole number.) Forecast Cisco's sales, NOPAT, and NOA for years 2017 through 2020 and the terminal period using the following assumptions: Sales growth 2017 Sales growth 2018-2020 Terminal growth Net operating profit margin Net operating asset turnover 1% 2% 1% 2016 rate rounded to three decimal places 2016 rate rounded to three decimal places compute the return on assets (ROA) and return on equity (ROE) for 2016 Complete the DuPont disaggregation of return on equity (ROE) for 2016. Analyze the DuPont financial ratios and discuss how Cisco Systems Inc. can achieve a high ROE. Compute net operating assets (NOA) for 2016. Compute net operating profit after tax (NOPAT) for 2016, assuming a federal and state statutory tax rate of 37%. (Round your answer to the nearest whole number.) Forecast Cisco's sales, NOPAT, and NOA for years 2017 through 2020 and the terminal period using the following assumptions: Sales growth 2017 Sales growth 2018-2020 Terminal growth Net operating profit margin Net operating asset turnover 1% 2% 1% 2016 rate rounded to three decimal places 2016 rate rounded to three decimal places

Answer rating: 100% (QA)

SOLUTION a Compute the return on assets ROA and return on equity ROE for 2016 Return on Assets ROA ROA Net Income Total Assets 10739 121652 0089 Return on Equity ROE ROE Net Income Shareholders Equity ... View the full answer