Estimate the value of a share of Target common stock using the discounted cash flow (DCF) model as of February 2, 2019. ($ millions) Reported 2018 Forecast Horizon Terminal 2019 2020 2021 2022 Period Increase in NOA 0x $ 0x $ 0x $ 0x $ 0x FCFF (NOPAT-Increase in NOA) Present value of horizon FCFF 0x 0x 0x 0x 0x 0x 0x 0x 0x Cum. present value of horizon FCFF $ x Present value of terminal FCFF x Total firm value x NNO 0x $ Firm equity value 0x Shares outstanding (millions) 0x $ Stock price per share 0x
Estimate the value of a share of Target common stock using the discounted cash flow (DCF) model as of February 2, 2019. ($ millions) Reported 2018 Forecast Horizon Terminal 2019 2020 2021 2022 Period Increase in NOA 0x $ 0x $ 0x $ 0x $ 0x FCFF (NOPAT-Increase in NOA) Present value of horizon FCFF 0x 0x 0x 0x 0x 0x 0x 0x 0x Cum. present value of horizon FCFF $ x Present value of terminal FCFF x Total firm value x NNO 0x $ Firm equity value 0x Shares outstanding (millions) 0x $ Stock price per share 0x
Cornerstones of Financial Accounting
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Chapter10: Stockholder's Equity
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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) 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
Sales
$75,956
NOPAT
NOA
3,269
23,620
2019
2020 2021
2022
$79,124 $83,680 $87,234 $92,196
4,002 3,572 4,351 3,939
24,197 26,007 26,677 28,611
Period
$93,428
4,617
28,571
Answer the following requirements with the following assumptions:
Assumptions
Terminal period growth rate
Discount rate (WACC)
Common shares outstanding
2%
7.63%
517.80 million
Net nonoperating obligations (NNO) $12,323 million
Estimate the value of a share of Target common stock using the discounted cash flow (DCF) model as of February 2, 2019.
Increase in NOA
($ millions)
FCFF (NOPAT-Increase in NOA)
Present value of horizon FCFF
Reported
2018
Forecast Horizon
Terminal
2019
2020
2021
2022
Period
0x $
0x
0x
$
0x
0х
0x
0x
0x
0x
0x
0x
0x
0x
0x
Cum. present value of horizon FCFF
x
Present value of terminal FCFF
x
Total firm value
x
NNO
0x
$
Firm equity value
0x
Shares outstanding (millions)
0x
$
0x
Stock price per share](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdbfd1007-49c9-4e8c-99c4-c19cfc1dd7e7%2Ff390bc1e-f332-4e54-917f-8dcba396315e%2Ff6pgq8o_processed.png&w=3840&q=75)
Transcribed Image Text: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
Sales
$75,956
NOPAT
NOA
3,269
23,620
2019
2020 2021
2022
$79,124 $83,680 $87,234 $92,196
4,002 3,572 4,351 3,939
24,197 26,007 26,677 28,611
Period
$93,428
4,617
28,571
Answer the following requirements with the following assumptions:
Assumptions
Terminal period growth rate
Discount rate (WACC)
Common shares outstanding
2%
7.63%
517.80 million
Net nonoperating obligations (NNO) $12,323 million
Estimate the value of a share of Target common stock using the discounted cash flow (DCF) model as of February 2, 2019.
Increase in NOA
($ millions)
FCFF (NOPAT-Increase in NOA)
Present value of horizon FCFF
Reported
2018
Forecast Horizon
Terminal
2019
2020
2021
2022
Period
0x $
0x
0x
$
0x
0х
0x
0x
0x
0x
0x
0x
0x
0x
0x
Cum. present value of horizon FCFF
x
Present value of terminal FCFF
x
Total firm value
x
NNO
0x
$
Firm equity value
0x
Shares outstanding (millions)
0x
$
0x
Stock price per share
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