FREE Trial
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 Target Application of Residual

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

image text in transcribed

Target Application of Residual Operating Income Model Reported Terminal Target ROPI ($ millions, except per share value and discount factors) 2022 Period 2018 2019 2020 2021 Sales 71,879? ? ? ? ? 3,392? ? ? NOPAT 20,653? ? ? ? ? NOA ROPI (NOPAT [NOA x rl) ? ? ? ? ? ? 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 Shares outstanding 538,796,010 Stock value per share ? Target Application of Residual Operating Income Model Reported Terminal Target ROPI ($ millions, except per share value and discount factors) 2022 Period 2018 2019 2020 2021 Sales 71,879? ? ? ? ? 3,392? ? ? NOPAT 20,653? ? ? ? ? NOA ROPI (NOPAT [NOA x rl) ? ? ? ? ? ? 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 Shares outstanding 538,796,010 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

A History Of Auditing The Changing Audit Process In Britain From The Nineteenth Century To The Present Day

A History Of Auditing The Changing Audit Process In Britain From The Nineteenth Century To The Present Day

Authors: Derek Matthews

1st Edition

0415648343, 978-0415648349

More Books

Students also viewed these Accounting questions

Question

★★★★★
What are the values of (a) 12 8, (b) 35 / (7), (c) (24 8) (4 + 5), (d) (18 4) / (3 + 9 5), (e) (22/11) (18 + 3) / (12/4)?

Answered: 1 week ago

Question

★★★★★
Suppose the returns on long-term corporate bonds and T-bills are normally distributed. Based on the historical record, use the NORMDIST Function in Excel to answer the following questions; (a) What...

Answered: 1 week ago

Question

★★★★★
Margin money will be reversed on a. Expiry date b. Date of liquidation c. End of accounting period d. None of the above

Answered: 1 week ago

Question

★★★★★
Nintendo Company, Ltd., reports the following financial information as of, or for the year ended, March 31, 2011. Nintendo reports its financial statements in both Japanese yen and U. S. dollars as...

Answered: 1 week ago

Question

★★★★★
Quration 02 a nact.1 cuput F2 is 0 when inguts W and z are equal, ellerwise the eatpain F2 is 1. b) (4 points) Using K-map, write the most simplified Boolean expression of the function F1

Answered: 1 week ago

Question

★★★★★
4.Over-the-Top Canopies (OTC) is evaluating two independent investments. Project S costs $160,000 and has an IRR equal to 10 percent, and Project L costs $150,000 and has an IRR equal to 8 percent....

Answered: 1 week ago

Question

★★★★★
Knightro has three variables that store the length of each of his runs, run1, run2, run3 and he is trying to find the average of these three numbers and save it into the variable name overall. Write...

Answered: 1 week ago

Question

★★★★★
Problem 2. By using R function generate a simple and random sample of size n for the population X ~N(2, 32). 3/n (i) Let n = 20, compute X-2 and (n-1)52. Then, repeat (i) for 100 times X-2 and (n-1)...

Answered: 1 week ago

Question

★★★★★
What does the term "acceptable level" mean when used in the GAO conceptual framework to describe threats to independence? The circumstances are fluid but stable in terms of the auditor's...

Answered: 1 week ago

Question

★★★★★
5. Wabasha Co. has two service departments (A and B) and two producing departments (X and Y). Data provided are as follows: Service Depts. Operating Depts. A B X Y Direct costs $150 $300 Services...

Answered: 1 week ago

Question

★★★★★
4.Find the network Id, broadcast id and the binary conversion of the following IPs. i.20. 210. 47. 225/13 ii.220. 20. 17. 5/27 iii.10. 10. 7. 17/19 iv. 192. 12. 8. 1/18 v.172. 1. 4. 5/20

Answered: 1 week ago

Question

★★★★★
3-7 Why are disruptive technologies so difficult for even the companies that develop them?

Answered: 1 week ago

Question

★★★★★
3-6 It has been said that the advantage that leading- edge retailers such as Dell and Walmart have over their competition isnt technology; its their management. Do you agree? Why or why not?

Answered: 1 week ago

Question

★★★★★
3. Are there any disadvantages to mining customer data? Explain your answer. With the amount of data available to companies doubling every year, new sources of data, and innovations in data...

Answered: 1 week ago

Previous Question Next Question