Question
1.Before doing the intrinsic value calculation, explains assumptions. For example, what is the proxy for risk-free rate and where you get it?Is it reasonable by
1.Before doing the intrinsic value calculation, explains assumptions. For example, what is the proxy for risk-free rate and where you get it?Is it reasonable by comparing with its historical data? What is the dividend growth rate? Is that reasonable by looking at the dividend payout history of the firms, its competitors' and the median of the industry?What data period do you choose to calculate g and why?
2.Calculate the intrinsic value of the stock and compare it with the market value. Draw a conclusion whether it is overvalued or undervalued.
Step by Step Solution
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Step: 1
Answer 1 Assumptions for Intrinsic Value Calculation Proxy for RiskFree Rate The riskfree rate is typically considered the yield on government bonds o...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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