Assume that a company’s dividends per share are projected to grow at 2% each year, its next year’s dividends per share is $1.20, and its cost of equity capital is 5%. Estimate the company’s per share stock price.
An analyst calculates residual operating income of $35.7 million from financial statements for 2012, using a required return for operations of 10 percent. She also forecasts residual operating income at the same level for 2013 and years after on net operating assets of $1,257 million at the end of 2012.
What is the analyst's forecast of NOPAT for 2013?
What is the value of the operations (enterprise value) based on these forecasts?