Question: Answers bust be on an excel spreadsheet. 1. Create a dividend discount model to value each stock. 2. Calculate the P/E ratio and the dividend
Answers bust be on an excel spreadsheet.
1. Create a dividend discount model to value each stock. 2. Calculate the P/E ratio and the dividend yield for each stock. 3. Rank each stock by expected return, highest to lowest.
| Stock Name | Last Price | Beta | Actual 2021 (Earnings Per Share) | Estimated 2022 (Earnings Per Share) | Estimated 2023 (Earnings Per Share) | Estimated 2024 (Earnings Per Share) | Actual 2021 (Dividends Per Share) | Estimated 2022 (Dividends Per Share) | Estimated 2023 (Dividends Per Share) | Estimated 2024 (Dividends Per Share) | Constant growth after 2024 | ||
| A | $136.35 | 1.11 | $13.64 | $16.18 | $19.49 | $21.83 | $6.87 | $ 8.15 | $9.82 | $11.00 | 2.68% | ||
| B | $167.60 | 1.07 | $20.95 | $23.74 | $28.05 | $32.23 | $8.97 | $10.16 | $12.00 | $13.80 | 3.15% | ||
| C | $174.27 | 1.31 | $11.62 | $14.88 | $17.40 | $20.58 | $6.65 | $8.51 | $9.95 | $11.77 | 4.03% | ||
| D | $177.55 | 1.30 | $11.84 | $13.48 | $17.08 | $19.97 | $3.41 | $3.88 | $4.92 | $5.75 | 4.70% | ||
| E | $96.05 | 0.93 | $6.00 | $7.00 | $7.83 | $9.36 | $3.24 | $3.78 | $4.23 | $ 5.05 | 4.76% |
Risk Free Rate:2.00%
Market Expected Return: 7.00%
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