Answered step by step
Verified Expert Solution
Question
1 Approved Answer
I need Help with the Dividend Discount Model , im not sure where I am going wrong Estimate the firm's stock price using the dividend-discount
I need Help with the Dividend Discount Model , im not sure where I am going wrong
- Estimate the firm's stock price using the dividend-discount model: Use an investment source (some have been provided in the Content area) and find: 1) the current dividend; 2) analyst's estimate growth rate for the next five to ten years; 3) an alternative growth estimate using the firm's historical growth rate or the formula "g=ROE x b".
- Use your estimate of the cost of equity in the WACC for the rE part of your formula: Combine the above information into the dividend-discount model (DDM).
My company is Home Depot
stock price is 205.77
outstanding share 1100286
Current Dividends are 5.44 annually
Cost of Equity is 7.39
my ROE is 6.74
my 5 year growth is 8.92
historical grow is 18.76
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started