If an analyst estimates the NOPLAT for each of the divisions in a three-division firm at $50 million,$30 million,and $20 million,respectively,it's safe to assume that the divisions contribute 50,30,and 20 percent,respectively,to overall firm value.

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Quizplus · Accepted Answer

This is not an appropriate technique to use unless the ROIC and growth projections for the three divisions are all the same, which is quite unlikely.

If an Analyst Estimates the NOPLAT for Each of the Divisions