$$ Disney$$s current stock price is $$140\mathrm{.}00$ per share. The average growth rate of the company$$s dividend has been $17\mathrm{.}7\%$ from $2004$ through $2018$

$$ Disney$$s return on equity is $28\mathrm{.}0\%$ and the company retains approximately $80\mathrm{.}0\%$ of its profits while paying out the remaining $20\mathrm{.}0\%$ in dividends.

$$ The company$$s stock currently trades at $21\mathrm{.}21$ times its current year earnings estimate of $$6\mathrm{.}60$ per share.

$$ Analysts expect the company to earn $$6\mathrm{.}19$ per share in $2020$ and $$6\mathrm{.}93$ in $2021.$

$$ Disney$$s peers in media networks trade at $25\mathrm{.}5$ times their current year earnings estimates while peers in parks, experiences and consumer products at $21\mathrm{.}9$; studio entertainment at $19\mathrm{.}1$ and DTCI at $14\mathrm{.}1.$

$$ Assume the expected return for Disney$$s stock is $6\mathrm{.}9\%.$

$1.$ Use the above information of Equity Analysis and Valuation for The Walt Disney Company $($Disney$)$ and assume the current year is $2019,$ calculate the intrinsic value of Disney stock using:

a$.$ Multi$-$Stage Growth Model

b$.$ Market Multiples Approach

$2.$ Based on the results calculated above:

a$.$ Reconcile Disney stock$$s intrinsic value and identify whether the stock was undervalued or overvalued.

b$.$ Recommend the most suitable valuation approach by discussing the advantages and disadvantages of each valuation approach.

$3.$ Based on the Bloomberg screenshots, evaluate how the performance of Disney stock changed relative to the S&P $500$ market index over the period $01/$Aug$/201901/$Aug$/2021$ to explain why or why not you would like to invest in the Disney stock.

Can you please show the workings for this question. I have provided the screenshots.

Equity Analysis and Valuation

Understand and compare the

theoretical equity valuation methods

to the more commonly$-$used multiple

valuation approach, and then apply

these tools to value a company.

This supplement explores the reasoning behind and the disad$-$

vantages of the three theoretical equity valuation models$-$con$-$

stant growth model, multi$-$stage growth model, and dividend

discount model$-$by comparing them to the most frequent$-$

ly$-$used market multiple valuation approach through the lens

of General Electric $($GE$).$

Subsequently, we will do the same valuations and compar$-$

isons with The Walt Disney Company $($Disney$)$ for homework.

HOW DISNEY MAKES MONEY

Disney has four operating segments: Media Networks, Parks,

Experiences & Consumer Products, Studio Entertainment, and

Direct$-$to$-$Consumer & International. The table shows the pro$-$

portion of Disney's total revenues and operating income that

come from each segment.

Disney Segment Revenues and Operating Income

As Deta form Facal Yeur $2018$ in Mesions, Eocep! A reantipes

Source: The War Disnoy Compary Amual Rsport $(10-.$K$0$

Disney Oper wting Margins by Siegment and Conwolidided

Disney Operating Margins by Segmant and Consoliduted

$($Box $1$ is continued on the next page$)$ THINKING ABOUT VALUATION

Consider purchasing a house. The fundamental valuation metric

in a house purchase is square feet. A person interested in pur$-$

chasing a house should look at the listing price per square foot

and compare it to the price per square foot of other houses that

recently sold in the area. If the current market for new homes

is $$112$ per square foot and the target bome is listed at $$124$ per

square foot, the target home may be overvalued. Focus on the

word may. It may be that the target home is superior to the prop$-$

erties used as comparables. Perhaps the target home is in a nicer

neighborhood or is built to a higher standard or has other char$-$

acreristics that warrant a premium to the comparable proper$-$

ties. All of these characteristics need to be considered. But the

beginning point of any valuation is uncovering the fundamen$-$

tal valuation metric of the asset, which in the case of our real

estate example, is square feet.

When valuing stock, the fundamental valuation metric may

be profit, cash flow, or dividends. These cash flows are made

to investors as a reward for their investment. Since they are

made after the asset has been purchased, appropriate valuation

techniques determine the present value of these cash flows to

uncower the intrinsic value of the stock. Each of the four equity

valuation metrics used in this case arrive at the intrinsic value

of Disney's stock by discounting the shareholder rewards $($or

returns$)$ from the dates they will be paid in the future to our

decision point in the present.

DISNEY'S NUMBERS

Use the following information on Disney to answer the case

questions.

Disney's current stock price is $$40\mathrm{.}00$ per share. The aver$-$

age growth rate of the company's dividend has been $17-7\%$ from

$2004$ through $2018.$

Note: You can use more information from Yahoo Finance to support your analysis.