Question: Costco is considering buying Target, which recently reported book value of equity of $2,417,762 and comprehensive income of $362,665. Target has 402,500 common shares issued

Costco is considering buying Target, which recently reported book value of equity of $2,417,762 and comprehensive income of $362,665. Target has 402,500 common shares issued and outstanding. Firms in the same industry have an average PB ratio of 6.10 and PE ratio of 24.6. What is the intrinsic value per share of Target's equity?

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To calculate the intrinsic value per share of Targets equity we need to use the discounted cash flow DCF method The DCF method takes into account the ... View full answer

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