Valuation Using Price-to-NOA Multiple and PB Multiple The following table provides summary data for Target Corp. and its competitors, Kohl’s Corp. and Walmart Stores Inc. (in millions) Target Kohl's Wal-Mart Company assumed value -- $13,487 $322,123 Equity assumed value -- $10,922 $272,541 Net operating assets $22,640 $8,092 $122,082 Book value of equity $11,300 $5,527 $ 72,500 Net nonoperating obligations (assets) $11,340 $2,565 $49,582 Common shares outstanding 510.9 shares 159.0 shares 2,844.0 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 Wal-Mart (b) Use Kohl’s and Walmart 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. Average of the two rounded ratios in (a) above Answer (Rounded to two decimal places.) Use your rounded answer above to calculate the following: Round company intrinsic value and equity intrinsic value to the nearest million. Round equity intrinsic value to the nearest cent. Company intrinsic value Equity intrinsic value Equity intrinsic value per share (c) Compute the PB ratio for both Kohl's and Wal-Mart. Round your answers to two decimal places.
Valuation Using Price-to-NOA Multiple and PB Multiple The following table provides summary data for Target Corp. and its competitors, Kohl’s Corp. and Walmart Stores Inc. (in millions) Target Kohl's Wal-Mart Company assumed value -- $13,487 $322,123 Equity assumed value -- $10,922 $272,541 Net operating assets $22,640 $8,092 $122,082 Book value of equity $11,300 $5,527 $ 72,500 Net nonoperating obligations (assets) $11,340 $2,565 $49,582 Common shares outstanding 510.9 shares 159.0 shares 2,844.0 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 Wal-Mart (b) Use Kohl’s and Walmart 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. Average of the two rounded ratios in (a) above Answer (Rounded to two decimal places.) Use your rounded answer above to calculate the following: Round company intrinsic value and equity intrinsic value to the nearest million. Round equity intrinsic value to the nearest cent. Company intrinsic value Equity intrinsic value Equity intrinsic value per share (c) Compute the PB ratio for both Kohl's and Wal-Mart. Round your answers to two decimal places.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Valuation Using Price-to-NOA Multiple and PB Multiple
The following table provides summary data for Target Corp. and its competitors, Kohl’s Corp. and Walmart Stores Inc.
| (in millions) | Target | Kohl's | Wal-Mart |
|---|---|---|---|
| Company assumed value | -- | $13,487 | $322,123 |
| Equity assumed value | -- | $10,922 | $272,541 |
| Net operating assets | $22,640 | $8,092 | $122,082 |
| Book value of equity | $11,300 | $5,527 | $ 72,500 |
| Net nonoperating obligations (assets) | $11,340 | $2,565 | $49,582 |
| Common shares outstanding | 510.9 shares | 159.0 shares | 2,844.0 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
Wal-Mart
(b) Use Kohl’s and Walmart 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.
Average of the two rounded ratios in (a) above
Answer
(Rounded to two decimal places.)
Use your rounded answer above to calculate the following:
Round company intrinsic value and equity intrinsic value to the nearest million. Round equity intrinsic value to the nearest cent.
Company intrinsic value
Equity intrinsic value
Equity intrinsic value per share
(c) Compute the PB ratio for both Kohl's and Wal-Mart.
Round your answers to two decimal places.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education