Fin 550 Milestone 1

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Southern New Hampshire University *

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550

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Finance

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Feb 20, 2024

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Fin 550 Milestone 1 Jasminlyn Miller Fin 550 Milestone One
I. Time Value of Money Target Corporation is an American retail corporation with 1,909 stores in the United States. Target is the eighth-largest retail store with 75.36 billion dollars’ worth of revenue. “With more than 368,000 employees and stores in all 50 U.S. states and the District of Columbia, Target Corp. is considered one of the largest retailers in the United States.” (Solutions, 2020). Target is part of the S&P 500 Index. Target’s Earnings per Share in 2020 was $6.36 and is projected at $8.64 for 2021. Target headquarters is in Minneapolis, Minnesota. In 1902, Target was originally founded under the name of Goodfellow Dry Goods   Company, by George D. Dayton. They wanted something different and wanted a place people could have a one-stop shopping experience. Following George D. Dayton's death, son George N. Dayton is named President of The Dayton Company.” (Target). In Roseville, Minnesota, the first Target Store was opened in 1962 and later its name was changed to Dayton Corporation. It wasn’t until the 2000’s when Target got its name Target. Question 1.         Interest Rate 5%   FCF - Years   2022 2021 2020   FCF in dollars*   $5,108,000 $7,918,000 $4,153,000               Pv*   $(4,864,762) $(7,540,952 ) $(3,955,238 )                         Total Pv*   $(16,360,952 )     *In millions
Question 2. Interest Rate 5%   FCF - Years   2022 2021 2020 FCF in dollars*   $4,597,200 $7,126,200 $3,737,700           Pv*   $(4,378,286) $(6,786,857) $(3,559,714)                   Total Pv*   $(14,724,857 )     *In millions Interest Rate 5% 3% FCF - Years   2020 2021 2022 2023 2024 2025 FCF in dollars*   $3,737,700 $7,126,200 $4,597,200 $4,735,116 $4,877,169 $5,023,485               Pv*   $(3,559,714) $(6,786,857 ) $(4,378,286) $(4,597,20 0) $(4,597,20 0) $(4,877,16 9)             *In millions   Total Pv*   $(28,796,427)       After doing the analysis it shows that risk reduction increases the present value of a company. Changing the risk in present value means that the cash flow of a company present value increase. This is due to more certainty around risk reduction. “Risk reduction deals with mitigating potential losses by reducing the likelihood and severity of a possible loss.” (Team, 2021). It’s recommended that Target should not be purchased at the calculated future price of $5,023,48. The trend shows that Future value will decrease and free cash flow will rise.
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Reference: Intellect. (2022). Www.mergentonline.com.ezproxy.snhu.edu . 00-696-1700. TARGET CORPORATION. Retrieved June 18, 2022, from http://www.mergentonline.com.ezproxy.snhu.edu/companydetail.php?compnumber=886 Team, T. I. (2021, September 30). Risk avoidance vs. risk reduction: What's the difference? Investopedia. Retrieved June 18, 2022, from https://www.investopedia.com/ask/answers/040315/what-difference-between-risk- avoidance-and-risk-reduction.asp Solutions, D. (Ed.). (2020, November 20). Target Corp. Companies History - The biggest companies in the world. https://www.companieshistory.com/target-corp/ . Target. (2021). 2020 Annual Report Target Corporation . https://investors.target.com/static- files/717a6df4-172c-484e-afbd-611131a7ce7b. Finance, Y. (2022, June 19). Target corporation (TGT) stock price, news, quote & history . Yahoo! Finance. Retrieved June 18, 2022, from https://finance.yahoo.com/quote/TGT? p=TGT&.tsrc=fin-srch