Using the forecasts in Exercise E14.7, forecast abnormal operating income growth and, from these forecasts, value the operations and the equity. The required return for operations is 10 .1 percent.

In Exercise 14.7

The following forecasts were made at the end of 2012 for a firm with net operating assets of $1,135 million and net financial obligations of $720 million (in millions of dollars):

The required return for operations is 10.1 percent. Forecast residual operating income for these years and, from these forecasts, value the operations and the equity.

2016E 2013E 2014E 2015E Operating income Net operating assets 200.09 1,299.46 229.08 1,487.75 187.00 1,214.45 214.10 1,390.42