Following are the income statements and balance sheets for Darden Restaurants, Inc. for the fiscal year ending May 28, 2017.
$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 (NOPM) \bullet Net operating asset turnover (NOAT) \bullet Net nonoperating obligations (NNO) b. Use the discounted free cash flow (DCF) model to estimate the per share value of Darden Restaurant's equity, at May 26, 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 $85.83 per share on July 26, 2017, the date the 10-K was filed with the SEC. How does your valuation compare with this closing price?$ Continued next page
$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 (NOPM) \bullet Net operating asset turnover (NOAT) \bullet Net nonoperating obligations (NNO) b. Use the discounted free cash flow (DCF) model to estimate the per share value of Darden Restaurant's equity, at May 26, 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 $85.83 per share on July 26, 2017, the date the 10-K was filed with the SEC. How does your valuation compare with this closing price?$ 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 (NOPM)

\bullet

Net operating asset turnover (NOAT)

\bullet

Net nonoperating obligations (NNO)
b. Use the discounted free cash flow (DCF) model to estimate the per share value of Darden Restaurant's equity, at May 26, 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?

A Company Can Increase Free Cash Flows to the Firm

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