Homework 5 - Stock Valuation Inputs Inflation Rate Real...

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Yves DewaDavid WorrellStocktwo10/27/2014Stock ValuationTwo StageInputsInflation Rate3%Real Discount Rate ( Real k)9%Earnings Retention Rate50%OutputsStage 2:Nominal Discount Rate (k)12.3%InfiniteStage 1: Explicit ForecastHorizonHistorical DataHorizon(ROI>k)(ROI = k)Period-2-10123456Inflation Rate2.8%3.1%3.0%3.0%3.0%3.0%3.0%3.0%Real Return on Investment (Real ROI)22.3%22.7%19.0%17.0%15.0%13.0%11.0%9.0%Nominal Return on Investment (ROI)25.7%26.5%22.6%20.5%18.5%16.4%14.3%12.3%Real Growth Rate in Dividend (Real g)11.2%11.4%9.5%8.5%7.5%6.5%5.5%4.5%Nominal Growth Rate in Dividend (g)14.3%14.8%12.8%11.8%10.7%9.7%8.7%7.6%Nominal Dividend / Share$5.10$5.84$6.64$7.49$8.37$9.27$10.17$11.05$11.89Continuation Value / Share$256.51Sum of Future Div. & Cont. Value.Shr$7.49$8.37$9.27$10.17$267.56PV of Future Div. & Cont. Value / Shr$6.67$6.64$6.55$6.40$150.00Intrinsic Value / Share$176.26
Yves DewaDavid WorrellStockdyn10/27/2014Stock ValuationDynamic ChartInputsInflation Rate3.0%6Earnings Retention Rate50.0%5OutputsReal Discount Rate ( Real k)9%7%8%9%10%11%12%$235.19 235.190168 235.19017 235.19017 235.19017 235.19017 235.19017Stage 2:Nominal Discount Rate (k)10.2%InfiniteStage 1: Explicit ForecastHorizonHistorical DataHorizon(ROI>k)(ROI = k)Period-2-10123456Inflation Rate2.8%3.1%3.0%3.0%3.0%3.0%3.0%3.0%

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Term
Fall
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Tags
Return On Investment ROI, Stock Valuation, Valuation, Treas, Treas Strip, Treas Bond

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