Following are forecasts of Target Corporation 's sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of January 31, 2008 Answer the following requirements assuming a terminal period growth rate of (1 ), discount rate (WACC) of (5 8 ), shares outstanding of 818 7 million...

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Following are forecasts of Target Corporation's sales, net operating profit after tax (NOPAT), and net operating assets

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Following are forecasts of Target Corporation's sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of January 31, 2008 .

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Answer the following requirements assuming a terminal period growth rate of $1 \%$, discount rate (WACC) of $5.8 \%$, shares outstanding of 818.7 million, and net nonoperating obligations (NNO) of $\$ 17,090$ million.

a. Estimate the value of a share of Target common stock using the discounted cash flow (DCF) model as of January 31, 2008 .

b. Target Corporation (TGT) stock closed at $\$ 50.68$ on March 31, 2008. How does your valuation estimate compare with this closing price? What do you believe are some reasons for the difference?

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Financial Accounting For MBAs

ISBN: 9781934319345

4th Edition

Authors: Peter D. Easton, John J. Wild, Robert F. Halsey, Mary Lea McAnally

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Question Posted: Jun 24, 2024 02:02 AM

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Following are forecasts of Target Corporation's sales, net operating profit after tax (NOPAT), and net operating assets

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Horizon Period Reported Terminal (In millions) 2008 2009 2010 2011 2012 Period Sales... $61,471 $65,282 $69,330 $73,628 $78,193 $78,975 NOPAT 3,244 3,445 3,658 3,885 4,126 4,167 NOA 32,397 34,406 36,539 38,804 41,210 41,622

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