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PLEASE USE TARGET CORPORATION (TGT) ON YAHOO FINANCE FOR THIS PROBLEM. I need my work checked for the whole thing and corrected, especially for PART
PLEASE USE TARGET CORPORATION (TGT) ON YAHOO FINANCE FOR THIS PROBLEM. I need my work checked for the whole thing and corrected, especially for PART C. I just need to know if I solved this correctly as I am not confident with my answers. My professor also stated to use 12% for Rm-Rf. Thanks.
What other information do you need. I have the entire problem+ my work added. Everything else you need is found on Yahoo Finance for Target.
Choose a stock that interests you. Utilizing Bloomberg, Yahoo Finance, or Google Finance, etc as a source of data, collect the following information: a. The stock's Beta b. Use the lyr market risk premium from Kenneth French's website c. The risk-free rate (rRF) d. The last dividend paid (D0) e. The annual expected growth rate of dividends (g) B. Use the Discounted Dividend Model for Constant Growth Stocks and solve for the intrinsic stock price (P0) Based on your above calculations, compare the calculated price with the current market price and indicate whether the stock price is overvalued, undervalued, or at equilibrium? Explain. C. Now, assume that your company has just released a new product and will be experiencing supernormal growth of 25% for the next three years. In Excel, use the information in "A" and the Discounted Dividend Model for Nonconstant Growth Stocks and solve for the intrinsic stock price (P0). 11/19/2012: Axdends =0.36.4=1.44 TW/14/2022: PV=FV/(1+r)t d.44=4.32/(1+r)10 =0.716.123 g=11.6% RMRt=12% osed the average enciz\% risk-free rate: 4.75 Re=4.75+1.02(12) =16.99 (B) D0=4.324=17.28 D1=D0(1+g) =17.28(1+1.1161)=36.5662 D1=36.57R=16.99g=0.1161 P0=D1/(Rg) 0=36.57/(16.990.1161)=2.1673
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