Question
Please, I need to see the calculation in excel, thanks, Let's assume that you're thinking about buying stock in West Coast Electronics. So far in
Please, I need to see the calculation in excel, thanks,
Let's assume that you're thinking about buying stock in West Coast Electronics. So far in your analysis, you've uncovered the following information: The stock pays annual dividends of $4.87 a share indefinitely. It trades at a P/E of 8.6 times earnings and has a beta of 1.18 . In addition, you plan on using a risk-free rate of 4.00 % in the CAPM, along with a market return of 11 %. You would like to hold the stock for 3 years, at the end of which time you think EPS will be
$8.26 a share. Given that the stock currently trades at $52.11 , use the IRR approach to find this security's expected return.
Now use the dividend valuation model (with constant dividends) to put a price on this stock. Does this look like a good investment to you? Explain.
This security's expected return (IRR is? __________(Round to two decimal places.)
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