fcfest - FCFE Stable Model FCFE STABLE GROWTH MODEL This...

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FCFE Stable Model Page FCFE STABLE GROWTH MODEL This model is designed to value the equity in a stable firm on the basis of free cashflows to equity, especially when they are different from dividends paid. Assumptions in the model: 1. The firm is in steady state and will grow at a stable rate forever. 2. The firm does not pay out what it can afford to in dividends, i.e., Dividends FCFE. User defined inputs The user has to define the following inputs to the model: 1. Current Earnings per share 2. Capital Spending and Depreciation per share 3. Change in working capital per share 4. Desired debt level for financing working capital and capital spending needs. 5. Cost of Equity or Inputs to the CAPM (Beta, Riskfree rate, Risk Premium) 6. Expected Growth Rate in free cashflows to equity forever.
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FCFE Stable Model Page Please enter inputs to the model: Current Earnings per share = $5.45 (in currency) {You can input all the numbers for the aggregate company, if you so desire} Capital Spending/share =
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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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fcfest - FCFE Stable Model FCFE STABLE GROWTH MODEL This...

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