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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 $ millions 2018 Terminal 2019 2020 2021 2022 $79,124 $83,830 $87,234 $92,346 Period $93,428 4,767 Sales $76,106 NOPAT 3,269 NOA 23,770 4,152 3,572 4,501 3,939 24,197 26,157 26,677 28,761 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) $12,473 million Estimate the value of a share of Target common stock using the discounted cash flow (DCF) model as of February 2, 2019. ($ millions) Increase in NOA Reported 2018 $ LA Forecast Horizon Terminal 2019 2020 2021 2022 Period 427 $ FCFF (NOPAT - Increase in NOA) Present value of horizon FCFF 3725 1960 $ 1612 520 $ 3981 2084 $ 1855 3461.4 1402.92 3246.03 1420.39 Cum. present value of horizon FCFF $ 0 Present value of terminal FCFF 0 Total firm value NNO 0 12473 Firm equity value $ -12473 Shares outstanding (millions) Stock price per share LA 517.8 24.05

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 $ millions 2018 Terminal 2019 2020 2021 2022 $79,124 $83,830 $87,234 $92,346 Period $93,428 4,767 Sales $76,106 NOPAT 3,269 NOA 23,770 4,152 3,572 4,501 3,939 24,197 26,157 26,677 28,761 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) $12,473 million Estimate the value of a share of Target common stock using the discounted cash flow (DCF) model as of February 2, 2019. ($ millions) Increase in NOA Reported 2018 $ LA Forecast Horizon Terminal 2019 2020 2021 2022 Period 427 $ FCFF (NOPAT - Increase in NOA) Present value of horizon FCFF 3725 1960 $ 1612 520 $ 3981 2084 $ 1855 3461.4 1402.92 3246.03 1420.39 Cum. present value of horizon FCFF $ 0 Present value of terminal FCFF 0 Total firm value NNO 0 12473 Firm equity value $ -12473 Shares outstanding (millions) Stock price per share LA 517.8 24.05

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 $ millions 2018 Terminal 2019 2020 2021 2022 $79,124 $83,830 $87,234 $92,346 Period $93,428 4,767 Sales $76,106 NOPAT 3,269 NOA 23,770 4,152 3,572 4,501 3,939 24,197 26,157 26,677 28,761 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) $12,473 million Estimate the value of a share of Target common stock using the discounted cash flow (DCF) model as of February 2, 2019. ($ millions) Increase in NOA Reported 2018 $ LA Forecast Horizon Terminal 2019 2020 2021 2022 Period 427 $ FCFF (NOPAT - Increase in NOA) Present value of horizon FCFF 3725 1960 $ 1612 520 $ 3981 2084 $ 1855 3461.4 1402.92 3246.03 1420.39 Cum. present value of horizon FCFF $ 0 Present value of terminal FCFF 0 Total firm value NNO 0 12473 Firm equity value $ -12473 Shares outstanding (millions) Stock price per share LA 517.8 24.05
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 $ millions 2018 Terminal 2019 2020 2021 2022 $79,124 $83,830 $87,234 $92,346 Period $93,428 4,767 Sales $76,106 NOPAT 3,269 NOA 23,770 4,152 3,572 4,501 3,939 24,197 26,157 26,677 28,761 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) $12,473 million Estimate the value of a share of Target common stock using the discounted cash flow (DCF) model as of February 2, 2019. ($ millions) Increase in NOA Reported 2018 $ LA Forecast Horizon Terminal 2019 2020 2021 2022 Period 427 $ FCFF (NOPAT - Increase in NOA) Present value of horizon FCFF 3725 1960 $ 1612 520 $ 3981 2084 $ 1855 3461.4 1402.92 3246.03 1420.39 Cum. present value of horizon FCFF $ 0 Present value of terminal FCFF 0 Total firm value NNO 0 12473 Firm equity value $ -12473 Shares outstanding (millions) Stock price per share LA 517.8 24.05
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