For Adobe Systems (ADBE), you only have FCF, no dividends. CAPM Model: The stock beta is...

 

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For Adobe Systems (ADBE), you only have FCF, no dividends. CAPM Model: The stock beta is 1.27. Use beta to calculate the rate of return. Assume the risk-free rate is 4.25% and the market risk premium (rm-rf) is 8%. FCF Model: Calculate the TVM growth rate. You will not use this number. Instead, use a growth rate of 5%. Use a discount rate of 7.5%. Use the average of all FCFs as your FCFo. The debt for this company is $4,126.0M and the number of shares is 458.6M. Find the value of one share of stock. Their previous stock price is $368.65 ADBE FCF 2017 1403.1 M 2018 1093.5 M 2019 1472.0 M 2020 1972.1 M 2021 1224.8 M 2022 1470.8 M For Adobe Systems (ADBE), you only have FCF, no dividends. CAPM Model: The stock beta is 1.27. Use beta to calculate the rate of return. Assume the risk-free rate is 4.25% and the market risk premium (rm-rf) is 8%. FCF Model: Calculate the TVM growth rate. You will not use this number. Instead, use a growth rate of 5%. Use a discount rate of 7.5%. Use the average of all FCFs as your FCFo. The debt for this company is $4,126.0M and the number of shares is 458.6M. Find the value of one share of stock. Their previous stock price is $368.65 ADBE FCF 2017 1403.1 M 2018 1093.5 M 2019 1472.0 M 2020 1972.1 M 2021 1224.8 M 2022 1470.8 M

Answer rating: 100% (QA)

Using the CAPM model First we need to calculate the market rate of return Market Rate of Return Risk... View the full answer