Question
Part 1: Consider the Gordon model of constant growth rate assumption. State briefly what this model says about the value of stocks. In 2019, Walmart
Part 1: Consider the Gordon model of constant growth rate assumption. State briefly what this model says about the value of stocks. In 2019, Walmart paid $2.12 in dividends per share. The stock traded for about $119 per share towards the end of the year. Find out a set of inputs to the Gordon growth model (e.g., the assumed growth rate g and the required rate of return r, that make the intrinsic value of the stock equal to the trading price of $119. There can be many combinations; you just need to find out one such combination by trial and error.
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