Can you complete these questions it continue from another assignment. Target Corp

Explanation of the Data Used for the EVA Analysis and Interpretation of Results 5. Explanation of the Data Used for the MVA Analysis and Interpretation of Results

USING EVAL FOR THE DCF STOCK VALUATION To proceed with the Discounted Cash Flow valuation of the company, it will be necessary to update (and carefully explain) the Valuation Parameters in eVal. There is a separate worksheet titled \"Valuation Parameters\" (tab at the bottom of eVal Excel program). 1. It will be necessary to estimate the cost of equity capital. For that estimate, use the CAPM. Today, the risk free rate is around 2% to 3%. The equity risk premium should be between 5% and 6% (the historical average). To complete the estimate, find the beta of the stock (e.g., Yahoo Finance). 2. Let the value of contingent claims on common equity remain at 0. 3. Use today's date for the date of the valuation. 4. Let the value of the dilution factor for splits remain at 1.0. 5. For the cost of net debt use either the average cost of outstanding debt or use an estimate of what you think it would cost to issue new debt. Explain the assumption. 6. Enter the cost of preferred stock if any is outstanding, otherwise enter 0%. 7. For the cost of minority interest use the same percentage as you use for the WACC. 8. The model instructs you to adjust the WACC so that the two equity values are approximately equal. ESTIMATED PRICE PER SHARE The estimated price per share (intrinsic value) then appears in the Green-coded cell at the top of the worksheet. WHAT TO DO IF ESTIMATED STOCK PRICE IS SIGNIFICANTLY DIFFERENT FROM CURRENT STOCK PRICE If you find that the estimated stock price is unreasonable and can't be explained adequately, then you may want to adjust some of the forecasting assumptions that were used in developing the initial forecast