Question
I am writing a report on Costco Wholesale Corporation. All question below are for Costco data around May 9, 2016. I need to do stock
I am writing a report on Costco Wholesale Corporation. All question below are for Costco data around May 9, 2016. I need to do stock valuation and need help. I used weekly data from Costco.com and S&P 500 May 2015 to May 2016, then did a regression in Excel and came up with beta of .84; The price per share on May 9 2016 was $148.59; GuruFocus said the risk free rate at that time was 1.83% and the dividend amount for May 2016 I found online was $1.65 (annual). Is that correct? Also answer the following questions: 1. What is the estimated stock price using the dividend-discount model. 2. What is the dividend growth estimate for Costco? What is the growth rate percent? and why do you think it's appropriate? 3. What is the cost of equity estimate and why do you think it's appropriate? 4. Market risk premium 4.64% 5. rate of return 6.47% 6. Show your calculation of Costco's stock price with the information above and the appropriate version of the dividend discount model. Wow!! Help? Thank you for all the calculations. They need to be calculated. That is what I need help with. How do I find those? per market-risk-premia.com the Market risk premium is 4.64%, market return 6.47% and risk free rate 1.83%. Also Costco dividends are quarterly and on 5-9-16; yield 1.21% and dividend $0.45. Also, I need help with dividend growth calculations etc to answer all questions above.Hx Costco dividends: per www.dividend.com 4-14-16 $0.45; 1-29-16 .40; 10-29-15 .40; 7-27-15 .40; 4-17.15 .40; 1-30-15 special dividend paid $5.00; 1-29-15 .355; 10-28-14 .355; 6-23-14 .355; 4-29-14 .355; 1-30-14 .3;10-29-13 .31; 7-22-13 .31; 4-30-13 .31; 1-24-13 .275 Thanks. Due tomorrow morning. Help?? Thanks!
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