Using the Gordon Model, calculate Starbucks Corporations Stock's Intrinsic Value. Please show process and what each variable means. Also, please let me know where you get the source of the numbers you use. Sites like Morningstar are encouraged. If CAPM is used, use the risk-free rate as 2.4% and the Return of Market as 10.6%. Thanks! Need to learn how to do these types of valuations.
(Please note it very possible that for the company you have selected, the growth number you choose to use will be greater than the required rate of return you compute. If this happens, you will need to use the uneven growth model, where you specify the current growth number, and what your group believes what the long term growth of the company will be. As a benchmark, most economists believe the long term growth of world GDP will be about 3.5%. You need to decide whether and by how much your company will exceed that growth.)