Question: Help please Estimating Share Value Using the DCF Model Following are forecasts of Home Depot's sales, net operating profit after tax (NOPAT), and net operating
Estimating Share Value Using the DCF 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 S millions Sales NOPAT Forecast Horizon Period Reported Terminal 2018 2019 2020 2021 2022 Period $124,433 $133,144 $142.464 $152,436 5163,107 $166,369 13,884 14,912 15,956 17,073 18,268 18,633 29,378 31,432 33,632 35,986 38,505 39,275 NOA 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 $31,538 million Required a. Estimate the value of a share of Home Depot's common stock using the discounted cash flow (DCF) 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 X b. Home Depot stock closed at $218.57 on March 28, 2019, the date the Form 10-K was filed with the SEC, How does your valuation estimate compare with this closing price? Stock price is appropriately valued
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
