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Estimating Share Value Using the DCF Model Following are forecasts of Target Corporation's sales, net operating profit after tax (NOPAT), and net operating assets (NOA)

Estimating Share Value Using the DCF Model

Following are forecasts of Target Corporation's sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of February 2, 2019, which we label fiscal year 2018.

Note: Complete the entire question in Excel and format each answer to two decimal places. Then enter the answers into the provided spaces below with two decimal places.

Reported Forecast Horizon Period Terminal
$ millions 2018 2019 2020 2021 2022 Period
Sales $75,956 $79,124 $83,680 $87,234 $92,196 $93,428
NOPAT 3,269 4,002 3,572 4,351 3,939 4,617
NOA 23,620 24,197 26,007 26,677 28,611 28,571

Answer the following requirements with the following assumptions:

Assumptions
Terminal period growth rate 2%
Discount rate (WACC) 7.63%
Common shares outstanding 517.80 million
Net nonoperating obligations (NNO) $12,323 million

Estimate the value of a share of Target common stock using the discounted cash flow (DCF) model as of February 2, 2019.

Reported Forecast Horizon Terminal
($ millions) 2018 2019 2020 2021 2022 Period
Increase in NOA

Answer

Answer

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FCFF (NOPAT - Increase in NOA)

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Present value of horizon FCFF

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Cum. present value of horizon FCFF

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Present value of terminal FCFF

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Total firm value

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NNO

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Firm equity value

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Shares outstanding (millions)

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Incorrect Mark 0.00 out of 1.00

Stock price per share

Answer

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