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Second time asking this question, first time answers came back wrong: Calculate the intrinsic value of GE In each of the following scenarios by using
Second time asking this question, first time answers came back wrong:
Calculate the intrinsic value of GE In each of the following scenarios by using the three-stage growth model of Spreadsheet 18.1. Treat each scenario Independently. a. The terminal growth rate will be 9.80%. (Round your answer to 2 decimal places.) Intrinsic value b. GE's actual beta Is 1.09. (Round your answer to 2 decimal places.) Intrinsic value c. The market risk premium is 9.90%. (Round your answer to 2 decimal places.) Intrinsic value B D | J Year 2017 E F G H Dividend Div growth Term value Investor CF 1.04 1.04 1.1 0.08 1.23 1.23 1 Inputs for GE 2 beta 3 mkt_prem 4 rf 5 k_equity 6 term gwth 7 2018 2019 0.025 0.1130 0.060 1.41 1.60 2020 2021 1.41 1.60 1.85 2.11 2.401 0.1544 1.85 2022 2023 0.1450 0.1355 2.11 2.40 8 9 2024 2.70 0.1261 2.70 3.02 3.02 2025 2026 .34 34 3.67 2027 2028 0.1166 0.1072 0.0978 0.0883 0.0789 0.0694) 3.67 3.99 2029 4.31 2030 10 11 12 Value line 13 forecasts of 14 annual dividends 15 16 17 Transitional period 18 with slowing dividend 19 growth 20 Beginning of constant 21 growth period 22 3.99 4.31 4.61 4.89 5.18 4.61 2031 4.89 0.0600 0.0600 2032 103.57 108.75 35.70/= PV of CF E17*(1+F17)/(B5 - F17) NPV(B5, H2:H17) Calculate the intrinsic value of GE In each of the following scenarios by using the three-stage growth model of Spreadsheet 18.1. Treat each scenario Independently. a. The terminal growth rate will be 9.80%. (Round your answer to 2 decimal places.) Intrinsic value b. GE's actual beta Is 1.09. (Round your answer to 2 decimal places.) Intrinsic value c. The market risk premium is 9.90%. (Round your answer to 2 decimal places.) Intrinsic value B D | J Year 2017 E F G H Dividend Div growth Term value Investor CF 1.04 1.04 1.1 0.08 1.23 1.23 1 Inputs for GE 2 beta 3 mkt_prem 4 rf 5 k_equity 6 term gwth 7 2018 2019 0.025 0.1130 0.060 1.41 1.60 2020 2021 1.41 1.60 1.85 2.11 2.401 0.1544 1.85 2022 2023 0.1450 0.1355 2.11 2.40 8 9 2024 2.70 0.1261 2.70 3.02 3.02 2025 2026 .34 34 3.67 2027 2028 0.1166 0.1072 0.0978 0.0883 0.0789 0.0694) 3.67 3.99 2029 4.31 2030 10 11 12 Value line 13 forecasts of 14 annual dividends 15 16 17 Transitional period 18 with slowing dividend 19 growth 20 Beginning of constant 21 growth period 22 3.99 4.31 4.61 4.89 5.18 4.61 2031 4.89 0.0600 0.0600 2032 103.57 108.75 35.70/= PV of CF E17*(1+F17)/(B5 - F17) NPV(B5, H2:H17)Step by Step Solution
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