Gilead Sciences, Inc. is a biopharmaceutical company that engages in the research,

development, and commercialization of medicines in areas of unmet medical need. The firm's

primary areas of focus include human immunodeficiency virus, acquired immunodeficiency

syndrome, liver diseases, hematology, oncology, and inflammation and respiratory diseases. It

offers antiviral products under Harvoni, Genvoya, Epclusa, Truvada, Atripla, Descovy, Stribild,

Viread, Odefsey, Complera$/$Eviplera$,$ Sovaldi, and Vosevi brands. The company was founded by

Michael L$.$ Riordan on June $22,1987,$ and is headquartered in Foster, CA$.$

Value the Gilead Sciences, Inc. using the method of comparables, dividend discount model, and

discounted cash flow model. Use the information below for the valuation.

For the method of comparables, use both Pfizer and Merck as comparable firms.

For DDM$,$ use a two$-$stage model and assume that dividends will grow at $3\%$ after $2025.$ Repeat

the calculations assuming the growth in dividends at $4\%$ and $5\%$ after $2025.$ Assume that you are

valuing the company on January $1,2024.$

For the DCF model, use a two$-$stage model and assume that FCFs will grow at $2\%$ after $2025.$

Repeat the calculations assuming the growth in FCF at $3\%$ and $4\%$ after $2025.$ Assume that you

are valuing the company on January $1,2024.$primary areas of focus include human immunodeficiency virus, acquired immunodeficiency

syndrome, liver diseases, hematology, oncology, and inflammation and respiratory diseases. It

offers antiviral products under Harvoni, Genvoya, Epclusa, Truvada, Atripla, Descovy, Stribild,

Viread, Odefsey, Complera$/$Eviplera$,$ Sovaldi, and Vosevi brands. The company was founded by

Michael L$.$ Riordan on June $22,1987,$ and is headquartered in Foster, CA$.$

Value the Gilead Sciences, Inc. using the method of comparables, dividend discount model, and

discounted cash flow model. Use the information below for the valuation.

For the method of comparables, use both Pfizer and Merck as comparable firms.

For DDM$,$ use a two$-$stage model and assume that dividends will grow at $3\%$ after $2025.$ Repeat

the calculations assuming the growth in dividends at $4\%$ and $5\%$ after $2025.$ Assume that you are

valuing the company on January $1,2024.$

For the DCF model, use a two$-$stage model and assume that FCFs will grow at $2\%$ after $2025.$

Repeat the calculations assuming the growth in FCF at $3\%$ and $4\%$ after $2025.$ Assume that you

are valuing the company on January $1,2024.$

Table $1$: WACC

Table $2$: Selected financial data for Gilead Sciences $($Factset$)$

Dr$.$ Jitka Hilliard, Raymond J$.$ Harbert College of Business, Auburn University

Table $3$: Analyst's estimated for selected items for Gilead

Table $4$: Selected financials for comparable companies