Question
Following are forecasts of Target Corporations sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of February 2, 2019, which we
Following are forecasts of Target Corporations 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 $75,856 $79,124 $83,580 $87,234 $92,096 $93,428 NOPAT 3,269 3,902 3,572 4,251 3,939 4,517 NOA 23,520 24,197 25,907 26,677 28,511 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) $12,223 million Estimate the value of a share of Target common stock using the discounted cash flow (DCF) model as of February 2, 2019. Reported Forecast Horizon Terminal ($ millions) 2018 2019 2020 2021 2022 Period Increase in NOA FCFF (NOPAT - Increase in NOA) Present value of horizon FCFF Cum. present value of horizon FCFF Present value of terminal FCFF Total firm value NNO Firm equity value Shares outstanding (millions) Stock price per share
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