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Estimating Share Value Using the ROPI Model Following are forecasts of sales, net operating profit after tax (NOPAT), and net Reported Horizon Period Terminal $ millions 2016 2017 2018 2019 2020 Period Sales $482,130 $486,951 $491,821 $496,739 $501,706 $506,723 NOPAT 16,634 17,043 17,214 17,386 17,560 17,735 NOA 124,940 126,186 127,448 128,722 130,009 131,309 Answer the following requirements assuming a discount rate (WACC) of 7%, a termin million, and noncontrolling interest (NCI) on the balance sheet of $3,065 million. (a) Estimate the value of a share of Walmart common stock using the residual operatin Rounding Instructions: Round your answer to the nearest whole number except for the discount factors and t Round the discount factors to five decimal places and the stock price to two decimal pla Use your rounded answers for subsequent calculations. Forcast Horizon Do not use negative signs with any of your answers below. Reported WMT ($ millions) 2016 2017 2018 201 Dueto 1 No complete Marked out of 23.00 Prag question # My Subscriptions es Estimating Share Value Using the ROPI Model Following are forecasts of sales, net operating profit after tax (NOPAT), and net operating assets (NCA) as of January 31, 2016, for Wal-Mart Stores, Inc Reported Horizon Period Terminal 5 millions 2016 2017 2018 2020 Period 5482.130 $36.951 591.21 56.739 3501.706 5506.723 NON 17.013 17214 17.560 12.25 124340126.136 1278 126722 130.009 17.30 2019 171 NOA Answer the following requirements assuming a discount rate (WACC) of a terminal period growth rate of common shares outstanding of 2.1 milion net nonoperating obligations of 41.329 million and noncontrolling interest INCI) on the balance sheet of $3.065 million (a) Estimate the value of a share of Walmart common stock using the residual operating income (RO) model as of January 31, 2016 Rounding Instructions: Round your answer to the nearest whole number except for the discount factors and the stock price per share Round the discount factors to five decimal places and the stock price to two decimal places Use your rounded answers for subsequent calculations. Do not use negative sins with any of your answers below Reported Forcat Marion WMT Terminal 2016 2017 2020 Period BOPINOPATINOM round decimace Cum procent value of horizon ROPS Present value of terminal ROP NA Type here to search BI LALOM Terminal Period 2019 2020 ers for subsequent calculations. Do not use negative signs with any of your answers below. Reported Forcast Horizon WMT (5 millions) 2016 2017 2018 ROPI (NOPAT - [NOABeg * rw]) Discount factor [1/(1+rw)t] (round 5 decimal places) Present value of horizon ROPI Cum present value of horizon ROPI $ Present value of terminal ROPI NOA Total firm value NNO NCI Firm equity value Shares outstanding (millions) (round two decimal places) Stock price per share $ $ (b) Walmart (WMT) stock closed at $68.80 on March 30, 2016, the date the 10-K was filed with the SEC. How does your valuation estim reasons for the difference? Ostock prices are a function of many factors. It is impossible to speculate on the reasons for the difference. Our stock price estimate is slightly higher than the WMT market price, indicating that we believe that WMT stock is slightly underval the WACC discount rate. Our lower stock price estimate might be due to more optimistic forecasts or a lower discount rate compared Our stock price estimate is slightly higher than the WMT market price, indicating that we believe that WMT stock is slightly undervalu . Type here to search NO NG 5 Firm equity value Shares outstanding millions Stock price per share $ tround two decimal places) b) Walmart (WMT) stock closed at 568.80 on March 30, 2016, the date the 10-K was filed with the SEC. How does your valuation estimate compare with this closing price? What do you believe are some reasons for the difference? Ostock prices are a function of many factors. It is impossible to speculate on the reasons for the difference. Oour stock price estimate is slightly higher than the WMT market price, indicating that we believe that WMT Stock is slightly undervalued. Stock prices are a function of expected NOPAT and NOA, as well as the WACC discount rate. Our lower stock price estimate might be due to more optimistic forecasts or a lower discount rate compared to other investors and analysts' model assumptions Cour stock price estimate is slightly higher than the WMT market price, indicating that we believe that WMT stock is slightly undervalued. Stock prices are a function of expected NOT and NOA, as well as the WACC discount rate. Our higher stock price estimate might be due to more pessimistic forecasts or a higher discount rate compared to other investors and analysts' model assumptions Cour stock price estimate is slightly higher than the WMT market price, indicating that we believe that WMT stock is slightly overvalued. Stock prices are a function of expected NOPAT and NOA as well as the WACC discount rate Our higher stock price estimate might be due to more pessimistic forecasts or a higher discount rate compared to other investors and analysts model assumptions Check 3 Save Answers od Type here to search D lagi ? Stock price per share (round two decimal places) (b)Walmart (WMT) stock closed at $68.80 on March 30, 2016, the date the 10-K was filed with reasons for the difference? Ostock prices are a function of many factors. It is impossible to speculate on the reasons for OOur stock price estimate is slightly higher than the WMT market price, indicating that we be the WACC discount rate. Our lower stock price estimate might be due to more optimistic forec Our stock price estimate is slightly higher than the WMT market price, indicating that we beli the WACC discount rate. Our higher stock price estimate might be due to more pessimistic fore Our stock price estimate is slightly higher than the WMT market price, indicating that we belie the WACC discount rate. Our higher stock price estimate might be due to more pessimistic forec Check Save Answers Type here to search BI e esc ? 12 NNO NO Fem equity Shares outstanding on Stock price ber share 5 tround two decimal places by Walmart (WMT) stock closed at 568.80 on March 30, 2016, the date the 10-K was filed with the SEC. How does your valuation estimate compare with this closing price? What do you believe are some reasons for the difference? Ostock prices are a function of many factors. It is impossible to speculate on the reasons for the difference Our stock price estimate is slightly higher than the WMT market price, indicating that we believe that WMT stock is slightly undervalued. Stock prices are a function of expected NOU and NOA as well as the WACC discount rate. Our lower stock price estimate might be due to more optimistic forecasts or a lower discount rate compared to other investors and analysts model assumptions Our stock price estimate is slightly higher than the WMT market price, indicating that we believe that WMT stock is slightly undervalued Stock prices are a function of expected NOT and NOL as well as the WACC discount rate. Our higher stock price estimate might be due to more pessimistic forecasts or a higher discount rate compared to other investors and analysts model assumptions Our stock price estimate is slightly higher than the WMT market price, indicating that we believe that WMT stock is slightly overvalod. Stock prices are a function of expected NOT and N as well as the WACC discount rate. Our higher stock price estimate might be due to more pessimistic forecasts or a higher discount rate compared to other investors and analysts' model assumption Check Save Answers Type to search lip 5 6

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