Following are the income statements and balance sheets for Darden Restaurants, Inc. for the fiscal year ending May 28, 2017.
Continued next page
Required:
a. Calculate the following metrics for 2017:
$\bullet$Net operating profit after tax (NOPAT) - assume the statutory tax rate is 37%
$\bullet$Net operating assets (NOA) $\bullet$Net operating profit margin (NOP
M) $\bullet$Net operating asset turnover (NOA
T) $\bullet$Net nonoperating obligations (NN
O) b. Use the residual operating income (ROP
I) model to estimate the per share value of Darden Restaurant's equity, at May 28, 2017. The company's weighted average cost of capital is 6%. Assume a sales growth rate of 5% for 2018-2021 with a terminal growth rate of 2%. c. Darden Restaurant's shares closed at $85.83 per share on July 26, 2017, the date the 10-K was filed with the SEC. How does your valuation compare with this closing price?

Question

Following are the income statements and balance sheets for Darden Restaurants, Inc. for the fiscal year ending May 28, 2017.
  Continued next page
  Required: 
a. Calculate the following metrics for 2017:
$\bullet$Net operating profit after tax (NOPAT) - assume the statutory tax rate is 37%
$\bullet$Net operating assets (NOA) $\bullet$Net operating profit margin (NOP
M) $\bullet$Net operating asset turnover (NOA
T) $\bullet$Net nonoperating obligations (NN
O) b. Use the residual operating income (ROP
I) model to estimate the per share value of Darden Restaurant's equity, at May 28, 2017. The company's weighted average cost of capital is 6%. Assume a sales growth rate of 5% for 2018-2021 with a terminal growth rate of 2%. c. Darden Restaurant's shares closed at $85.83 per share on July 26, 2017, the date the 10-K was filed with the SEC. How does your valuation compare with this closing price?

Quizplus · Accepted Answer

The Answer of Following are the income statements and balance sheets for Darden Restaurants, Inc. for the fiscal year ending May 28, 2017.
  Continued next page
  Required: 
a. Calculate the following metrics for 2017:
$\bullet$Net operating profit after tax (NOPAT) - assume the statutory tax rate is 37%
$\bullet$Net operating assets (NOA) $\bullet$Net operating profit margin (NOP
M) $\bullet$Net operating asset turnover (NOA
T) $\bullet$Net nonoperating obligations (NN
O) b. Use the residual operating income (ROP
I) model to estimate the per share value of Darden Restaurant's equity, at May 28, 2017. The company's weighted average cost of capital is 6%. Assume a sales growth rate of 5% for 2018-2021 with a terminal growth rate of 2%. c. Darden Restaurant's shares closed at $85.83 per share on July 26, 2017, the date the 10-K was filed with the SEC. How does your valuation compare with this closing price?

Following Are the Income Statements and Balance Sheets for Darden ∙\bullet∙

Following Are the Income Statements and Balance Sheets for Darden $\bullet$