| STOCK VALUATION MODEL - Dividend Discount Model - DDM) |
| | | (Dividends & Repurchases) |
| | | | | | ENTER DATA IN YELLOW-CODED CELLS |
| NAME OF COMPANY | | International Bancshares (IBOC) | | | OUTPUT BELOW & IN SUBSEQUENT WORKSHEETS |
| | | BE VERY CAREFUL WITH THE DECIMAL POINTS |
| LAST YEAR | | 2016 | Year |
| NUMBER OF SHARES OUTSTANDING (Mil.) | | 66,313,490.00 | Millions of Shares | | WATCH DECIMAL POINT |
| MARKET PRICE OF STOCK / SHARE | | $38.70 | Dollars Per Share |
| NET INCOME AFTER TAXES | | $133,932,000.00 | Millions of Dollars |
| TOTAL SALES | | $549,616,000.00 | Millions of Dollars |
| BOOK VALUE OF EQUITY | | $1,724,667,000.00 | Millions of Dollars |
| RISK FREE RATE (10 Yr. T- Bond) | | 2.38% | Annual Percentage Rate |
| DIVIDENDS PAID (TOTAL) | | $39,570,000.00 | Millions of Dollars | | (Find on Statement of Cash Flows) |
| STOCK REPURCHASES (TOTAL) | | $7,790,000.00 | Millions of Dollars | | (Find on Statement of Cash Flows) |
| REQUIRED INFORMATION FOR CALCULATION OF REQUIRED RATE OF RETURN |
| BETA OF STOCK | | 0.59 |
| MARKET RISK PREMIUM | | 5.50% | Expected Market Risk Premium % | | | | Should be Between 5% & 6% |
| REQUIRED INFORMATION FOR VARIABLE GROWTH RATE VALUATIONS | | | | | | Terminal |
| | | 2017 | 2018 | 2019 | 2020 | Terminal |
| EXPECTED GROWTH RATE (DIVIDENDS & STOCK REPURCHASES) | | 5.40% | 7.50% | 5.00% | 5.00% | 2.30% | The Terminal Growth Rate Should |
| | | | | | | | Not Exceed 2% to 3% |
| | | OUTPUTS AND VALUATIONS |
| COMPUTER-GENERATED CALCULATIONS |
| EARNINGS PER SHARE | | $2.02 |
| LAST CASH DIVIDEND & STOCK REPURCHASE PAYMENT PER SHARE | | $0.71 |
| EXPECTED ANNUAL GROWTH RATE (DIVIDENDS & STOCK REPURCHASES) | | 4.71% | Geometric Mean of Annual Rates |
| REQUIRED RATE OF RETURN (k) | | 5.63% | CAPM |
| REQUIRED RATE OF RETURN (k) | | 6.65% | Dividend Discount Model |
| REQUIRED RATE OF RETURN (k) | | 6.14% | Average of CAPM and Dividend Discount Model |
| SUSTAINABLE RATE OF GROWTH | | 5.02% | (ROE * (1-Payout Ratio)) |
| COMPUTER-GENERATED CALCULATIONS |
| STOCK VALUE - CONSTANT GROWTH MODEL | | $19.05 |
| STOCK VALUE - VARIABLE GROWTH MODEL | | $21.59 |
BLUT16
table_1a.ddm_stock_valuation_model.xlsx
