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Estimate the value of target using a discounted cashflow

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Question - Target Corp generated $10 billion of Operating Cash Flow last year while spending $ 6 billion on investments in Fixed Assets (capital expenditures) and an additional $0.5 billion on increases in Working Capital. You expect Free Cash Flow to grow by 15% for the next two years and then grow at 4% annually forever. You require a 15% expected annual return on your investment in Target. Estimate the value of Target using a discounted cashflow analysis, assuming that Target has no debt outstanding.

Reference no: EM132991199

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