Estimating Share Value Using the DCF Model Following are forecasted sales, NOPAT, and NOA for AT&T for 2019 through 2022

[answerhappygod]

Estimating Share Value Using The Dcf Model Following Are Forecasted Sales Nopat And Noa For At T For 2019 Through 2022 1 (100.91 KiB) Viewed 94 times

Estimating Share Value Using the DCF Model Following are forecasted sales, NOPAT, and NOA for AT&T for 2019 through 2022 a. Forecast the terminal period values assuming a 2% terminal period growth rate. Round answers to the nearest dollar. Reported $ millions 2018 Sales Forecast Horizon 2019 2020 2021 2022 Terminal Period $170,756 $181,001 $191,861 $203,373 $215,576 $ 219,888 ✔ 20,895 22,082 23,407 24,812 26,300 $ 26,826 ✔ 369,039 390,931 414,387 439,251 465,607 $ NOPAT NOA 474,919 ✔ b. Estimate the value of a share of AT&T common stock using the discounted cash flow (DCF) model as of December 31, 2018; assume a discount rate (WACC) of 5.7%, common shares outstanding of 7,281.6 million, net nonoperating obligations (NNO) of $175,155 million, and noncontrolling interest (NCI) from the balance sheet of $9,795 million. Rounding instructions: • Use rounded answers for subsequent computations. • Round answers to the nearest whole number unless otherwise noted (do not round shares outstanding). • Round discount factor to 5 decimal places and stock price per share to two decimal places. • Use negative signs for your FCFF and Present value of horizon FCFF answers, when appropriate. Otherwise, do not use negative signs with your answers. TXRH Terminal Reported 2018 thousands 2022 Period $ Increase in NOA 26,356 ✔ $ Forecast Horizon 2021 24,864 ✓ $ (52) ✔ 0.84679 ✔ 2019 21,892 $ 190 ✓ 0.94607 ✔ 179.75 ✔ FCFF (NOPAT - Increase in NOA) 2020 23,456 ✔ $ (49) ✔ 0.89505 x (43.86) ✔ (56) ✔ Discount factor [1/(1+rw)t] 0.80112 ✓ Present value of horizon FCFF (44.03) ✔ (44.86) ✔ Cum PV of horizon FCFF Present value of terminal FCFF Total firm value NNO NCI Firm equity value Shares outstanding Stock price per share $ 47 ✔ 379,210 x 379,257 x 175,155 ✓ 9,795 ✔ $ 194,307 * 7,282 * $ 26.69 ✔ < × ×< < × | $ 9,311 ✓ 17,514 ✓