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Reported $ Forecast Horizon Period Terminal millions 2018 2019 2020 2021 2022 Period Sales $100,629 $107,673 $115,210 $123,274 $131,904 $134,542 NOPAT 11,228 12,059 12,904 13,807 14,773 15,069 NOA 23,758 25,419 27,198 29,102 31,139 31,761 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 $25,504 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: $ b. Home Depot stock closed at $176.76 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?

Reported $ Forecast Horizon Period Terminal millions 2018 2019 2020 2021 2022 Period Sales $100,629 $107,673 $115,210 $123,274 $131,904 $134,542 NOPAT 11,228 12,059 12,904 13,807 14,773 15,069 NOA 23,758 25,419 27,198 29,102 31,139 31,761 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 $25,504 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: $ b. Home Depot stock closed at $176.76 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?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Reported $ Forecast Horizon Period Terminal millions 2018 2019 2020 2021 2022 Period Sales $100,629 $107,673 $115,210 $123,274 $131,904 $134,542 NOPAT 11,228 12,059 12,904 13,807 14,773 15,069 NOA 23,758 25,419 27,198 29,102 31,139 31,761 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 $25,504 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: $ b. Home Depot stock closed at $176.76 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?
Transcribed Image Text:Reported $ Forecast Horizon Period Terminal millions 2018 2019 2020 2021 2022 Period Sales $100,629 $107,673 $115,210 $123,274 $131,904 $134,542 NOPAT 11,228 12,059 12,904 13,807 14,773 15,069 NOA 23,758 25,419 27,198 29,102 31,139 31,761 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 $25,504 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: $ b. Home Depot stock closed at $176.76 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?
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