Now calculate the intrinsic value of three of the firms you selected in the previous question. Make reasonable judgments about the market risk premium and the risk-free rate.

Previous question

Choose 10 firms that interest you and download their financial statements from finance.yahoo.com.

a. What is the required return on each firm based on the CAPM? You can get the beta of each firm from its Statistics page. 

b. Try using a two-stage growth model, making reasonable assumptions about how future growth rates will differ from current growth rates. Compare the intrinsic values derived from the two-stage model to the intrinsic values you find assuming a constant-growth rate. Which estimate seems more reasonable for each firm?