Business, 16.04.2020 03:32 unknown9263

Following are financial statement numbers and select ratios for Target Corp. for the fiscal year 2016. Current Forecast Horizon Terminal Year ($ millions) 2016 2017 2018 2019 2020 Total revenues $69,495 $71,580 $73,727 $75,939 $78,217 $78,999 Net operating profit after tax (NOPAT) 3,302 3,436 3,539 3,645 3,754 3,792 Net operating assets (NOA) 21,128 21,757 22,409 23,082 23,774 24,012 Forecast assumptions and other financial information for Target are as follows: Revenue growth 3% Net operating profit margin (NOPM) 4.8% Net operating asset turnover (NOAT) 3.29 Terminal growth rate 1% Discount rate 7% Shares outstanding in millions 556.2 Stockholders' equity $10,953 Net nonoperating obligations (NNO) $10,175 Required: a. Use the discounted free cash flow (DCFF) model to estimate the value of Target’s equity, per share at fiscal year-end 2016. b. Target Corp. shares closed at $53.82 per share on March 8, 2017, the date the 10-K was filed with the SEC. How does your valuation compare with this closing price?

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