Calculate the intrinsic value of Rio Tinto in each of the following scenarios by using the...
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Calculate the intrinsic value of Rio Tinto in each of the following scenarios by using the three-stage growth mode of Spreadsheet 18.1. Treat each scenario independently. a. The terminal growth rate will be 11.10%. (Round your answer to 2 decimal places.) Intrinsic value b. Rio Tinto's actual beta is 1.02. (Round your answer to 2 decimal places.) Intrinsic value c. The market risk premium is 10.30%. (Round your answer to 2 decimal places.) Intrinsic value Inputs for GE beta mkt_prem rf k_equity term_gwth 1.8 0.08 0.029 0.1730 0.102 Value line forecasts of annual dividends Transitional period with slowing dividend growth A Year 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Dividend iv grovt Tern valueinvestor CF 3.12 3. 38 3.64 3.90 4.19 4.51 4.87 3.12 3.38 3.64 3.90 4.19 4.51 4.87 5. 27 5.72 6. 22 6.79 7.42 8.14 8.95 9.86 10.86 0.0740 0.0768 0.0796 0.0824 0.0852 0.0880 0.0908 0.0936 0.0964 0.0992 0.1020 0.1020 Beginning of constant E17 (1+F17)/(B5 - F17) growth period 168. 63 5. 27 5.72 6. 22 6.79 7.42 8.14 8.95 9.86 179.49 37. 86 PV of CF NPV (B5, H2:H17) Calculate the intrinsic value of Rio Tinto in each of the following scenarios by using the three-stage growth mode of Spreadsheet 18.1. Treat each scenario independently. a. The terminal growth rate will be 11.10%. (Round your answer to 2 decimal places.) Intrinsic value b. Rio Tinto's actual beta is 1.02. (Round your answer to 2 decimal places.) Intrinsic value c. The market risk premium is 10.30%. (Round your answer to 2 decimal places.) Intrinsic value Inputs for GE beta mkt_prem rf k_equity term_gwth 1.8 0.08 0.029 0.1730 0.102 Value line forecasts of annual dividends Transitional period with slowing dividend growth A Year 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Dividend iv grovt Tern valueinvestor CF 3.12 3. 38 3.64 3.90 4.19 4.51 4.87 3.12 3.38 3.64 3.90 4.19 4.51 4.87 5. 27 5.72 6. 22 6.79 7.42 8.14 8.95 9.86 10.86 0.0740 0.0768 0.0796 0.0824 0.0852 0.0880 0.0908 0.0936 0.0964 0.0992 0.1020 0.1020 Beginning of constant E17 (1+F17)/(B5 - F17) growth period 168. 63 5. 27 5.72 6. 22 6.79 7.42 8.14 8.95 9.86 179.49 37. 86 PV of CF NPV (B5, H2:H17)
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Related Book For
Managerial accounting
ISBN: 978-0471467854
1st edition
Authors: ramji balakrishnan, k. s i varamakrishnan, Geoffrey b. sprin
Posted Date:
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