To conduct a comprehensive DCF valuation on Target, calculate enterprise, total firm, and equity values of Target by estimating the Terminal Value (T+1 = 2028) and discounting free cash flows using the WACC of 8.32%.

Estimate the Terminal Value that captures the present value of FCFFs from 2028 (T+1) and onward using the steps below:

a) Estimate the terminal growth rate (g)? Provide details on your response. b) What is your estimate for the terminal return on invested capital (ROIC)? Provide supporting details of your process and response. c) Deduce the steady-state reinvestment rate (b) leveraging the following steady-state relation: reinvestment rate (b) = g / ROIC. Justify if the implied reinvestment rate (b = g/ROIC) is logical.

d) Calculate the the terminal value using the following formula based on NOPAT, g and ROIC.

e) By discounting FCFF using the estimated WACC, find the enterprise value (i.e., value of operating assets).

f) Calculate the total firm value by adding (any) excess cash to enterprise value.

e) calculate the equity value of Target by subtracting the market value of debt from total firm value.