Two-stage dividend discount model


Problem: Using 2-stage DDM and CAPM to value stocks:

Beta of company: 1.15
Market price: $30
Intrinsic value: ?
Risk-free rate 4.50%
Expected market return: 14.5%

EPS and dividend growth rates for first 3 years: 12% per year

EPS and dividend growth rates thereafter: 9% per year

Estimate the intrinsic value oif the company using the data and the 2-stage dividend discount model.

Solution Preview :

Prepared by a verified Expert
Finance Basics: Two-stage dividend discount model
Reference No:- TGS01801017

Now Priced at $20 (50% Discount)

Recommended (95%)

Rated (4.7/5)

2015 ┬ęTutorsGlobe All rights reserved. TutorsGlobe Rated 4.8/5 based on 34139 reviews.