Following are forecasted sales

Following are forecasted sales, NOPAT, and NOA for Stars Strategies for
2019 through 2022.

Stars Strategies

Reported

2018

Forecast Horizon Period

$ millions

2019

2020

2021

2022

Sales

$15,544

$16,010

$16,491

$16,985

$17,495

NOPAT

2,737

2,818

2,902

2,989

3,079

NOA

5,837

6,012

6,193

6,378

6,570

Required:

  1. Forecast the terminal period values assuming a 1% terminal period
    growth for all three model inputs, that is Sales, NOPAT, and NOA
  2. Estimate the value of a share of Stars Strategies common stock
    using the discounted cash flow model; assume a discount rate (WACC) of
    5.7%, common shares outstanding of 862.9 million, net nonoperating
    obligations (NNO) of

$5,640 million, and noncontrolling interest (NCI) from the balance sheet
of $299 million.

  1. Estimate the value of a share of Stars Strategies common stock
    using the residual operating income (ROPI) model. Assume a discount rate
    (WACC) of 5.7%, common shares outstanding of 862.9 million, net nonoperating
    obligations (NNO) of $5,640 million, and noncontrolling interest (NCI)
    from the balance sheet of $299 million.
  2. The company’s stock closed at $66.70 on February 21, 2019, the date
    the 10-K was filed with the SEC. How do your valuation estimates compare
    with this closing price? What do you believe are some reasons for the
    differences?
  3. 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?
  4. What would WACC have to be to warrant the actual stock price on
    February 21, 2019?

Place this order or similar order and get an amazing discount. USE Discount code “GET20” for 20% discount

Posted in Uncategorized