Homework Help is Here – Start Your Trial Now!
Business
Accounting
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 2019 Terminal Period $93,428 4,517 28.571 $ millions 2018 Sales NOPAT NOA $75,856 3.269 23.520 Answer the following requirements with the following assumptions: Assumptions Terminal period growth rate Discount rate (WACC) 2% 7.63% Common shares outstanding 517.80 million Net nonoperating obligations (NNO) $12,223 million Estimate the value of a share of Target common stock using the discounted cash flow (DCF) model as of February 2, 2019. Terminal Period ($ millions) Increase in NOA FCFF (NOPAT - Increase in NOA) Present value of horizon FCFF 2020 2021 2022 $79,124 $83,580 $87,234 $92,096 3.902 3.572 4,251 3.939 24,197 25.907 26,677 28,511 Reported 2018 Cum, present value of horizon FCFF $ Present value of terminal FCFF Total firm value NNO Firm equity value Shares outstanding (millions) Stock price per share $ $ $ 2019 $ Forecast Horizon 2020 2021 $ $ 2022 $

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 2019 Terminal Period $93,428 4,517 28.571 $ millions 2018 Sales NOPAT NOA $75,856 3.269 23.520 Answer the following requirements with the following assumptions: Assumptions Terminal period growth rate Discount rate (WACC) 2% 7.63% Common shares outstanding 517.80 million Net nonoperating obligations (NNO) $12,223 million Estimate the value of a share of Target common stock using the discounted cash flow (DCF) model as of February 2, 2019. Terminal Period ($ millions) Increase in NOA FCFF (NOPAT - Increase in NOA) Present value of horizon FCFF 2020 2021 2022 $79,124 $83,580 $87,234 $92,096 3.902 3.572 4,251 3.939 24,197 25.907 26,677 28,511 Reported 2018 Cum, present value of horizon FCFF $ Present value of terminal FCFF Total firm value NNO Firm equity value Shares outstanding (millions) Stock price per share $ $ $ 2019 $ Forecast Horizon 2020 2021 $ $ 2022 $

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

please do not provide solution in image format thank you!

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 2019 2018 $75,856 2020 2021 2022 $79,124 $83,580 $87,234 $92,096 Terminal Period $93,428 3,269 3,902 3,572 4,251 3,939 4,517 23,520 24,197 25,907 26,677 28,511 28,571 $ millions Sales NOPAT NOA Answer the following requirements with the following assumptions: Assumptions Terminal period growth rate 2% 7.63% Discount rate (WACC) Common shares outstanding 517.80 million Net nonoperating obligations (NNO) $12,223 million Estimate the value of a share of Target common stock using the discounted cash flow (DCF) model as of February 2, 2019. Terminal Forecast Horizon 2020 2021 Period ($ millions) Increase in NOA FCFF (NOPAT - Increase in NOA) Reported 2018 Present value of horizon FCFF Cum. present value of horizon FCFF $ Present value of terminal FCFF Total firm value NNO Firm equity value Shares outstanding (millions) Stock price per share $ $ $ 2019 $ $ $ 2022 $
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 2019 2018 $75,856 2020 2021 2022 $79,124 $83,580 $87,234 $92,096 Terminal Period $93,428 3,269 3,902 3,572 4,251 3,939 4,517 23,520 24,197 25,907 26,677 28,511 28,571 $ millions Sales NOPAT NOA Answer the following requirements with the following assumptions: Assumptions Terminal period growth rate 2% 7.63% Discount rate (WACC) Common shares outstanding 517.80 million Net nonoperating obligations (NNO) $12,223 million Estimate the value of a share of Target common stock using the discounted cash flow (DCF) model as of February 2, 2019. Terminal Forecast Horizon 2020 2021 Period ($ millions) Increase in NOA FCFF (NOPAT - Increase in NOA) Reported 2018 Present value of horizon FCFF Cum. present value of horizon FCFF $ Present value of terminal FCFF Total firm value NNO Firm equity value Shares outstanding (millions) Stock price per share $ $ $ 2019 $ $ $ 2022 $
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Income Statement Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS