Question
Determine the Intrinsic Value of Nvidia (NVDA). A. Estimate the required rate of return (= discount rate) on the stock using the CAPM. 1. Risk-free
Determine the Intrinsic Value of Nvidia (NVDA).
A. Estimate the required rate of return (= discount rate) on the stock using the CAPM.
1. Risk-free rate: The annual yield on a long-term government bond has been typically used.
2. Market risk premium: It has been often assumed to be 4.0% 6.0%, although there is very little consensus on its value amongst practitioners or academics.
3. Beta: You can find the beta of the stock in popular financial datasets. Of course, you can estimate the beta of the stock by yourself.
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Cases in Financial Reporting
Authors: Michael J. Sandretto
1st edition
538476796, 978-0538476799
