valuation

Project Description:

estimate the value of one share of common stock using the residual operating income model. use a four year horizon period. assume a cost of capital of 7%, and sales growth of 4% in the horizon period and 1% in the terminal period.
estimate the value of one share of common stock using the discounted cash flow model. use the same assumptions as in part 1.
estimate the value of one share of common stock using the discounted cash flow model, but change at least two of the assumptions to something you feel is more accurate. as a suggestion, you might assume sales growth in the forecast period to be equal to what you used in the forecast case, and you might use an industry average cost of capital from a current source like this one (http://pages.stern.nyu.edu/~adamodar/new_home_page/datafile/wacc.htm).
compare the results of your models to the company's current stock price. do you recommend to buy, sell, or hold? why? what other information might be important to your recommendation that is not captured in your model?
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Price Type: Negotiable

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