Question: What is the Dividend Discount Model for FedEx - need breakdown of steps as I don't understand it and would like to know where answers

What is the Dividend Discount Model for FedEx

- need breakdown of steps as I don't understand it and would like to know where answers come from

IVFirm = Intrinsic value of the company
Intrinsic Value IVFirm = IVDebt + IVEquity IVDebt = Intrinsic value of the company liabilities
IVEquity = Intrinsic value of the company equity
Capital Asset Pricing Model (CAPM) (Cost of Equity Capital)
CAPM = Risk-free rate + beta risk + stock-specific risk
re = rf + [ (rm rf)]
Risk Free rate Beta (volatility) Market Premium (stock specific risk)
Cost of Debt Capital
rd = avg. borrowing rate for debt X [1 - Marginal Tax Rate]
Weighted Average Cost of Capital
rw = ( rd X (IVdebt / IVfirm) ) + ( re X (IVequity / IVfirm))

Dividend Discount Model = Value of Stock/Discount Rate- Dividendgrowth rate

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