Question

Following are forecasts of sales, NOPAT, NOA as of 12/31/20 for Day-Brite. Assuming a WACC of 5.5%, terminal growth rate of 1%, common shares outstanding of 145.5M, and NNO of $6.2M a. Estimate the value of a share of Day-Brite’s common stock using the DCF & ROPI methods as of 12/31/20. b. Day-Brite stock closed at $425.50 on 2/21/19, the date the 10-K was filed with the SEC. How does your valuation estimate compare with this closing price? What action might you take? Forecast Horizon ($ millions) 2020 Actual 2021 2022 2023 2024 Terminal Period Sales 54,806 55,629 56,463 57,310 58,169 58,751 NOPAT 2,400 2,448 2,485 2,522 2,560 2,585 NOA 3,883 3,945 4,004 4,065 4,125 4,167

          Following are forecasts of sales, NOPAT, NOA as of 12/31/20 for Day-Brite.
Assuming a WACC of 5.5%, terminal growth rate of 1%, common shares
outstanding of 145.5M, and NNO of $6.2M
a. Estimate the value of a share of Day-Brite’s common stock using the DCF &
ROPI methods as of 12/31/20.
b. Day-Brite stock closed at $425.50 on 2/21/19, the date the 10-K was filed
with the SEC. How does your valuation estimate compare with this closing
price? What action might you take?
Forecast Horizon
($ millions)
2020
Actual 2021 2022 2023 2024
Terminal
Period
Sales 54,806 55,629 56,463 57,310 58,169 58,751
NOPAT 2,400 2,448 2,485 2,522 2,560 2,585
NOA 3,883 3,945 4,004 4,065 4,125 4,167

Added by Tracy S.

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