FREE Trial S
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Estimate the value of a share of Target common stock using the residual operating income model as of Feb 3, 2018 (Assuming 1% year over

Estimate the value of a share of Target common stock using the residual operating income model as of Feb 3, 2018

(Assuming 1% year over year growth.)image text in transcribed

Terminal 2022 Period 2019 2020 2021 Target Application of Residual Operating Income Model Target ROPI ($ millions, except per share value and discount factors) Sales NOPAT NOA Reported 2018 71,879 ? 3,392 ? 20,653 ? ROPI (NOPAT - [NOA r]) Discount Factor Present value of horizon ROPI Cum present value of horizon ROPI Present value of terminal ROPI NOA . . . . . Total Firm Value Less (plus): NNO Less: NCI Firm Equity Value . . 538,796,010 Shares outstanding Stock value per share Terminal 2022 Period 2019 2020 2021 Target Application of Residual Operating Income Model Target ROPI ($ millions, except per share value and discount factors) Sales NOPAT NOA Reported 2018 71,879 ? 3,392 ? 20,653 ? ROPI (NOPAT - [NOA r]) Discount Factor Present value of horizon ROPI Cum present value of horizon ROPI Present value of terminal ROPI NOA . . . . . Total Firm Value Less (plus): NNO Less: NCI Firm Equity Value . . 538,796,010 Shares outstanding Stock value per share

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Total Money Makeover Journal A Guide For Financial Fitness

The Total Money Makeover Journal A Guide For Financial Fitness

Authors: Dave Ramsey

1st Edition

ISBN: 1404110070, 978-1404110076

More Books

Students also viewed these Finance questions

Question

★★★★★
Let's suppose you want to use site-directed mutagenesis to investigate a DNA sequence that functions as a response element for hormone binding. From previous work, you have narrowed down the response...

Answered: 1 week ago

Question

★★★★★
An equimolar liquid mixture of benzene and toluene is separated into two product streams by distillation. A process flowchart and a somewhat oversimplified description of what happens in the process...

Answered: 1 week ago

Question

★★★★★
2. What advice do you have for health crisis communicators who are worried about creating panic? For those who are worried that too many warnings will make people indifferent when true emergencies...

Answered: 1 week ago

Question

★★★★★
Without permission, Grissom entered onto land owned by another and then proceeded to cut and sell the timber from the land. On learning that the timber had been sold, the owner of the land brought an...

Answered: 1 week ago

Question

★★★★★
Estimate the value of a share of Target common stock using the residual operating income model as of Feb 3, 2018 (Assuming 1% year over year growth.) Terminal 2022 Period 2019 2020 2021 Target...

Answered: 1 week ago

Question

★★★★★
A corporation, with a December 31, 2021 year-end, purchased manufacturing equipment for $60,000 on January 1 and a delivery truck for 55,000 on June 30. It sold on June 30, an old delivery truck that...

Answered: 1 week ago

Question

★★★★★
Microbrewers Incorporated makes four beers: Light, Dark, Ale, and Premium. The products require: water, malt, hops, and yeast. Assume the supply of water is free, so that it is the amount of other...

Answered: 1 week ago

Question

★★★★★
Create a one-page memo, in good form, to a colleague charged with preparing consolidated financial statements for your company, addressing the basis for deferring inter-company profit associated with...

Answered: 1 week ago

Question

★★★★★
10 4 points Presented here are the comparative balance sheets of Hames Incorporated at December 31, 2023 and 2022. Sales for the year ended December 31, 2023, totaled $550,000. HAMES INCORPORATED...

Answered: 1 week ago

Question

★★★★★
On Newton: Create two sub interfaces, for VLANs 10 and 20. - Enable dot1q trunking for each sub interface. (1 mark) Using VLSM, split 172.16.0.0/24 into (see above selection method) further...

Answered: 1 week ago

Question

★★★★★
Part One: Applying Coulomb's Law 1. Calculate the electrostatic force between two point-charges of +5.00 mC and +3.00 mC each if the distance between the charges is 350 mm. (3 marks)

Answered: 1 week ago

Previous QuestionNext Question