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Assume the following expected free cash flows for Target Corp. for 2019: Current Forecast Horizon 2019 2020 2021 Terminal Year 2022 2023 Free cash flows

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Assume the following expected free cash flows for Target Corp. for 2019: Current Forecast Horizon 2019 2020 2021 Terminal Year 2022 2023 Free cash flows to the firm (FCFF) $4,650 $4,880 $5,130 $5,390 $5,650 $5.766 The company has net nonoperating obligations (NNO) of $10,000 and 5,000 shares outstanding. Calculate the per share stock price using the FCFF information above, a discount rate of 7%, and a terminal growth rate of 2%. (Hint: a. Calculate PV FCFF for each of 2020 to 2023 and sum them up: b. Calculate PV Terminal Year: c. Calculate Total Firm value by adding up (a) and (b): d. Subtract net nonoperating obligation to get total equity value; e. Divide total equity value by shares outstanding to get the per share stock price)

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