I'm having trouble calculating my high end and low end in my finance assignment. My company is
Question:
I'm having trouble calculating my high end and low end in my finance assignment. My company is Target and I'm supposed to use the past 3 years' average growth rate (3.38%) to calculate the high-end. And then use the average of 5 years (5.53%) and 10 years (15.02%) for the low end which would be (10.28). The problem is the low end is higher than the high end. Since the discount rate is 10%, I cant subtract it from 10.28 because then ill get a negative number for the stock price. the formula would be
price= D(1+g)/r-g
Year Growth % per year (g)
6/2020 2.36
6/2019 3.25
6/2018 4.24
6/2017 7.27
6/2016 10.55
6/2015 20.61
6/2014 19.57
6/2013 20
6/2012 25
6/2011 37.31
Management Accounting
ISBN: 978-0132570848
6th Canadian edition
Authors: Charles T. Horngren, Gary L. Sundem, William O. Stratton, Phillip Beaulieu