Valuation Using Price-to-NOA Multiple and PB Multiple The following table provides summary data for Target and its competitors, Kohl's and Wal-Mart. (in millions) Company assumed value Equity assumed value Net operating assets Book value of equity Net nonoperating obligations (assets) Common shares outstanding Target Kohl's Wal-Mart $23,098 $237,306 $22,470 $198,288 $25,652 $6,231 $100,591 $15,633 $5,603 $61,573 $10,109 $628 $39,018 860 shares 321 shares 41 shares (a) Compute the price to net operating assets ratio for both Kohl's and Wal-Mart. Round your answers to two decimal places. Kohl's 3.71 Wal-Mart 2.36 (b) Use Kohl's and Wal-Mart as comparables, along with the price to NOA ratios from part (a), and then estimate for Target its company intrinsic value, its equity intrinsic value, and its equity intrinsic value per share. Round the intrinsic value and equity intrinsic value to the nearest million and the value per share to the nearest cent. Average of the two rounded ratios in (a) above 4.89 (Rounded to two decimal places.) Use your rounded answer above to calculate the following: Company intrinsic value $ 125,349 x million Equity intrinsic value $ 115,240 million Equity intrinsic value per share $ 134 (c) Compute the PB ratio for both Kohl's and Wal-Mart. Round your answers to two decimal places. Kohl's 4.01 Wal-Mart 3.22 (d) Use Kohl's and Wal-Mart as comparables, along with the PB ratios from part (c), and then estimate for Target its equity intrinsic value and its equity intrinsic value per share. Round the equity intrinsic value to the nearest million and the value per share to the nearest cent. Average of the two rounded ratios in (c) above 3.62 (Round to two decimal places.) Use the rounded average calculated above to calculate the following: Equity intrinsic value $ 56,519 x million Equity intrinsic value per share $ 65.7 Previous Next