One Period Pricing Model 1. Go to finance.yahoo.com, search for the stock page for Merck (MRK). Find MRK's current trading price, Forward Dividend (Annual) in dollar, and its 1-year target estimate. Current Price: $102.67 Forward Dividend: 2.92 1 year target estimate: $117.19 2. calculate the stock price if you required rate of return is 10% per year. This would be your intrinsic value (The fair price for Merck if the required rate of return is 10%). - Compare it to the current stock price from the website, would you buy the stock? - If you buy the stock today at the price you find on Yahoo, what would be your rate of return over the next year?

One Period Pricing Model 1. Go to finance.yahoo.com, search for the stock page for Merck (MRK). Find MRK's current trading price, Forward Dividend (Annual) in dollar, and its 1-year target estimate. Current Price: $102.67 Forward Dividend: 2.92 1 year target estimate: $117.19 2. calculate the stock price if you required rate of retum is 10% per year. This would be your intrinsic value (The fair price for Merck if the required rate of retum is 10% ). - Compare it to the current stock price from the website, would you buy the stock? - If you buy the stock today at the price you find on Yahoo, what would be your rate of return over the next year