Estimating Share Value Using the ROPI Model Following are forecasted sales, NOPAT, and NOA for Colgate-Palmolive Company for 2019 through 2022. 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. a. Forecast the terminal period values assuming the following terminal period growth rate. Assumption Terminal period growth rate 1% Reported Terminal Forecast Horizon Period $ millions Sales NOPAT NOA 2018 2019 2020 2021 2022 $15,562 $16,028 $16,509 $17,003 $17,513 $ 2,755 2,836 2,920 3,007 3,097 Period 0 0 0 5,855 6,030 6,211 6,396 6,588 b. Estimate the value of a share of Colgate-Palmolive common stock using the residual operating income (ROPI) model using the following assumptions and the information above. Assumptions Discount rate (WACC) 5.70% Common shares outstanding 880.9 million Net nonoperating obligations (NNO) $5,658 million Noncontrolling interest (NCI) ($ millions) $317 million Reported 2018 ROPI (NOPAT -[NOABeg x rw]) Present value of horizon ROPI Cum present value of horizon ROPI $ 8,617.57 Present value of terminal ROPI 50,441.71 NOA Total firm value 0 59,059.28 Less (plus) NNO 0 Less NCI 0 Firm equity value $ 53,718.28 Shares outstanding (millions) 880.9 Stock price per share $ 60.98 2019 Forecast Horizon 2020 Terminal 2021 2022 Period $ 0 $ 0 $ 0 $ 0 $ 0 2,290.7 2,230.74 2,172.84 2,116.91 c. Colgate-Palmolive's stock closed at $66.70 on February 21, 2019, the date the Form 10-K was filed with the SEC. How does your valuation estimate compare with this closing price? Lower d. The forecasts you completed assumed a terminal growth rate of 1%. What if the terminal rate had been 2%. What would your estimated stock price have been? Value $ 63.05 e. What would WACC have to be to warrant the actual stock price on February 21, 2019? WACC 5.45%