Question: 3. Excel Question. (2 points) This question requires data collection. You can use http://finance.yahoo.com to find the numbers. Please note the date on which you

3. Excel Question. (2 points) This question requires data collection. You

3. Excel Question. (2 points) This question requires data collection. You can use http://finance.yahoo.com to find the numbers. Please note the date on which you downloaded the data. The questions are about CVS Health Corporation (ticker: CVS). (a) What is the current price and the current price-earnings ratio? (b) What is the current plow-back ratio? (c) What is the growth rate of earnings for the next 5 years according to the analysts? Hint: look for annual growth rates under Analysis. What is the growth rate of earnings for the next year according to analysts? (d) What is the CAPM beta of CVS? Hint: look for Statistics. If the risk-free rate Rf is 1% and the market risk premium E[RM] Rf is 9%, what is the required rate of return on CVS according to the CAPM? (e) Suppose the earnings and dividends of CVS will grow at a rate equal to the 5 year forecast from part (c) forever, meaning the Gordon Growth Model (GGM) applies. What is the price-earnings ratio according to the GGM? (f) What growth rate does the current market price-earnings ratio imply, under our numerical assumptions regarding the value of the risk-free rate and the market risk premium. 3. Excel Question. (2 points) This question requires data collection. You can use http://finance.yahoo.com to find the numbers. Please note the date on which you downloaded the data. The questions are about CVS Health Corporation (ticker: CVS). (a) What is the current price and the current price-earnings ratio? (b) What is the current plow-back ratio? (c) What is the growth rate of earnings for the next 5 years according to the analysts? Hint: look for annual growth rates under Analysis. What is the growth rate of earnings for the next year according to analysts? (d) What is the CAPM beta of CVS? Hint: look for Statistics. If the risk-free rate Rf is 1% and the market risk premium E[RM] Rf is 9%, what is the required rate of return on CVS according to the CAPM? (e) Suppose the earnings and dividends of CVS will grow at a rate equal to the 5 year forecast from part (c) forever, meaning the Gordon Growth Model (GGM) applies. What is the price-earnings ratio according to the GGM? (f) What growth rate does the current market price-earnings ratio imply, under our numerical assumptions regarding the value of the risk-free rate and the market risk premium

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