Valuation Help
1 0
g
Estimation of g
http://www.bloomberg.com. Select the "Market and Data" and then “Bond and Rates”, to find 10-year yield on Treasury securities as the risk-free rate in the CAPM.
k k
k
b
k k
2. k , 1 0
k 1 0
1 is next year’s dividend (see below) and 47 is the closing market price
3. k
k
k 9.03 %
1 0
1 0
k
: From yahoo.com I find that the current year’s dividend (D0 $1.95. We need to estimate next year’s dividend or D1.
1 0
therefore I estimate next year’s dividend to be:
1 0 $2.07
: N
1 – g
$55.20.
$47.00
g
9.95 %