Estimating Share Value Using the ROPI Model Following are forecasts of Target Corporation’s sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of January 30, 2016.

$ millions Reported 2016 Horizon Period Terminal 2017 2018 2019 2020 Period Sales. . . . . . . . . . . . . . . . . . . $73,785 $75,261 $76,766 $78,301 $79,867 $80,666 NOPAT . . . . . . . . . . . . . . . . . 3,312 3,387 3,454 3,524 3,594 3,630 NOA . . . . . . . . . . . . . . . . . . . 21,445 21,872 22,309 22,755 23,210 23,443 Answer the following requirements assuming a terminal period growth rate of 1%, a discount rate

(WACC) of 6%, common shares outstanding of 602 million, and net nonoperating obligations (NNO)

of $8,488 million.

???????? Estimate the value of a share of Target common stock using the residual operating income (ROPI)

model as of January 30, 2016.

???????? Target Corporation (TGT) stock closed at $81.87 on March 11, 2016, the date the 10-K was filed with the SEC. How does your valuation estimate compare with this closing price? What do you believe are some reasons for the difference?