Stock 1 : UPS

find the following for the stock ups -

1) What is the current Dividend per Share?

You can find it on Yahoo Finance. Remember Dividend per Share, not dividend yield.

2) What is the number of shares outstanding?

You can find it in the most recent 10-Q, Income Statement. Use diluted shares.

3) What is FCFE (Free Cash Flow to Equity) amount for the trailing twelve months (TTM)?

4) For each stock, calculate FCFE per Share = Question 3 Answer / Question 2 Answer

5) What is the beta of the stock? Use Yahoo Finance.

6) Calculate the 5-year beta using monthly data in the Data_for_Beta sheet. It should be close to the beta from Question 5.

7) Calculate the equity discount rate, using the beta, an expected equity market return of 9%, and a risk-free rate of 3.0%.

8) Assumed Dividend per Share growth rate of x.xx% and the beta from question 7.

9) Assume a FCFE per Share growth rate of x.xx% and the equity discount rate from question 7.

10) Assume a FCFE per Share growth rate of x.xx% and the equity discount rate from question 7.

11) Assume a FCFE per Share growth rate of x.xx%. Reduce the equity discount rate from question 7 by 1%.

12) Compare the answers (the intrinsic values) for questions 10 and 11. What did you notice? What did you learn?