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 %