implprem - $326.49 Implied Risk Premium in current level of...

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Sheet1 Page 1 Implied Risk Premium Calculator Enter level of the index = 970.43 Enter current dividend yield = 1.60% (if you want, you can add stock buybacks to this num Enter expected growth rate in earnings for next 5 ye 8.00% Enter current long term bond rate = 5.92% Enter risk premium = 5.50% Enter expected growth rate in the long term = 5.92% (As a default, it is set equal to long term bond rate) 1 2 3 4 5 Expected Dividends = $16.76 $18.10 $19.55 $21.11 $22.80 Expected Terminal Value = $439.16 Present Value = $15.04 $14.58 $14.13 $13.70 $269.03 Intrinsic Value of Index =
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Unformatted text preview: $326.49 Implied Risk Premium in current level of Index = 1.86% (Go under Tools and choose Solver: See below) 1 2 3 4 5 Expected Dividends = $16.76 $18.10 $19.55 $21.11 $22.80 Expected Terminal Value = $1,297.92 Present Value = $15.55 $15.58 $15.61 $15.65 $908.03 Intrinsic Value of Index = $970.43 This is a picture of the solver option, with the inputs that I used (Do not tr Enter current level of index where you see 759.64. Sheet1 Page 2 mber) ry to enter numbers in it)....
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This note was uploaded on 06/28/2010 for the course MKTG 00HP01 taught by Professor Himanshu during the Spring '10 term at Indiana Institute of Technology.

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implprem - $326.49 Implied Risk Premium in current level of...

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