Estimating Share Value Using the ROPI Model

Following are forecasts of Target Corporations 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				Terminal
$ millions	2018	2019	2020	2021	2022	Period
Sales	$75,356	$79,124	$83,080	$87,234	$91,596	$93,428
NOPAT	3,269	3,402	3,572	3,751	3,939	4,017
NOA	23,020	24,197	25,407	26,677	28,011	28,571

Answer the following requirements with the following assumptions:

Assumptions
Terminal period growth rate	2%
Discount rate (WACC)	7.63%
Common shares outstanding	517.80	million
Net nonoperating obligations (NNO)	$11,723	million

Estimate the value of a share of Target common stock using the residual operating income (ROPI) model as of February 2, 2019.

		Reported	Forecast Horizon				Terminal
	($ millions)	2018	2019	2020	2021	2022	Period
	ROPI (NOPAT - [NOABeg x rw])		Answer	Answer	Answer	Answer	Answer
	Present value of horizon ROPI		Answer	Answer	Answer	Answer
	Cumulative present value of horizon ROPI	Answer
	Present value of terminal ROPI	Answer
	NOA	Answer
	Total firm value	Answer
	Less NNO	Answer
	Firm equity value	Answer
	Shares outstanding (millions)	Answer
	Stock price per share	Answer