Estimating Share Value Using the ROPI Model

Following are forecasts of Target Corporation$$s 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 $20182019202020212022$ Period

Sales $$75,356$ $$79,124$ $$83,080$ $$87,234$ $$91,596$ $$93,428$

NOPAT $3,2693,4023,5723,7513,9394,017$

NOA $23,02024,19725,40726,67728,01128,571$

Answer the following requirements with the following assumptions:

Assumptions

Terminal period growth rate $2\%$

Discount rate $($WACC$)7\mathrm{.}63\%$

Common shares outstanding $517\mathrm{.}80$ 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$)20182019202020212022$ Period

ROPI $($NOPAT $-[$NOABeg x rw$])$

Present value of horizon ROPI

Cum present value of horizon ROPI

Present value of terminal ROPIEstimating Share Value Using the ROPI Model

Following are forecasts of Target Corporation's 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.

Answer the following requirements with the following assumptions:

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