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 January 30, 2016

	Reported	Horizon Period				Terminal
$ millions	2016	2017	2018	2019	2020	Period
Sales	$77,118	$78,660	$80,233	$81,838	$83,475	$84,310
NOPAT	3,470	3,540	3,610	3,683	3,756	3,794
NOA	23,135	23,598	24,070	24,551	25,043	25,293

Answer the following requirements assuming a terminal period growth rate of 1%, a discount rate (WACC) of 6%, common shares outstanding of 602 million, and net nonoperating obligations (NNO) of $8,488 million.

Estimate the value of a share of Target common stock using the discounted cash flow (DCF) model as of January 30, 2016.

Instructions:

• Round all answers to the nearest whole number, except for discount factors and stock price per share.
• Round discount factors to 5 decimal places.
• Round stock price per share to two decimal places.
• Do not use negative signs with any of your answers.
  

		Reported	Forecast Horizon				Terminal
($ millions)		2016	2017	2018	2019	2020	Period
Increase in NOA
FCFF (NOPAT - Increase in NOA)
Discount factor [1/(1+rw)t]
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