Following are financial statement numbers and select ratios for Target Corp for

Following are financial statement numbers and select

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5. Following are financial statement numbers and select ratios for Target Corp. for the year ended February 3, 2009. CurrentForecast HorizonTerminal Year($millions)20092010201120122013Sales64,948 73,067 82,200 92,475 104,034 107,155 Net operating profit after tax (NOPAT)3,3123,726 4,192 4,716 5,306 5,465 Net operating assets (NOA)26,50929,823 33,551 37,745 42,463 43,737 Forecast assumptions and other financial information for Target are as follows:Sales growth12.5%Net operating profit margin (NOPM)5.1%Net operating asset turnover (NOAT)2.45Terminal growth rate3%Discount rate7%Shares outstanding in millions865.2Stockholders' equity$15,633Net nonoperating obligations (NNO)$ 9,685Required:a) Use the discounted free cash flow (DCFF) model to estimate the value of Target’s equity, per share at February 3, 2009.b) Target Corp. shares closed at $72.12 per share on February 3, 2009. How does your valuation compare with this closing price? © Cambridge Business Publishers, 2010 Test Bank, Module 12 12-29
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Answer: 4,191 Cambridge Business Publishers, ©2010 12-30 Financial Accounting for MBAs, 4th Edition
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6. Following are financial statement numbers and select ratios for American Eagle Outfitters for the year ended January 2008. CurrentForecast HorizonTerminal Year($ thousands)20082009201020112012Sales2,989,871 3,587,845 3,982,508 4,420,584 4,906,848 5,054,054 Net operating profit after tax (NOPAT)337,855 405,426 450,023 499,526 554,474 571,108 Net operating assets (NOA)489,341587,209 651,802 723,500 803,085 827,177 Forecast assumptions and other financial information for AE Outfitters are as follows:Sales growth 200920%Sales growth 2010 to 201211%Terminal growth rate3%Net operating profit margin (NOPM)11.3%Net operating asset turnover (NOAT)6.11Discount rate10%Shares outstanding in millions226,117Stockholders' equity$1,155,552Net nonoperating obligations (NNO)$(778,946)Required:a) Use the discounted free cash flow (DCFF) model to estimate the value of AE Outfitters’ equity, per share at January 28, 2008.b) AE Outfitters’ shares closed at $26.07 per share on January 28, 2008. How does your valuation compare with this closing price?
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