Question
Stock valuation using the 2-stage dividend discount method: Relevant data for Walmart Inc. is provided below. Currently, the Walmart Inc. stock is trading in the
Stock valuation using the 2-stage dividend discount method:
Relevant data for Walmart Inc. is provided below. Currently, the Walmart Inc. stock is trading in the market at $146.81.
| Walmart Inc. | |
| Expected Annual Dividends | Year |
| $ 2.23 | 2022 |
| $ 2.28 | 2023 |
| $ 2.32 | 2024 |
| $ 2.36 | 2025 |
| 1.93% | Stage1 dividend growth (g1) |
| 2.00% | Stage2 dividend growth (g2) |
| 0.500 | Stock Beta () |
| 1.655% | Risk-free Rate (Rf) |
| 6.00% | Market Risk Premium (MRP) |
| $ 146.81 | Current Stock Price |
How much is the value of this company's stock using the 2-stage dividend discount method?
Enter your answer in the following format:12.34 Hint1: Refer to the video 'Stock Valuation: Dividend discount model' and the Excel template. Answer is between 73.85 and 94 Hint2: Compute R, CF1, CF2, CF3, and CF4 as shown in the video and then compute NPV; R=4.655%; CF4=$93.20 Note: There is no need to change any underlying Excel formulas.
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Portfolio Performance Measurement And Benchmarking
Authors: Jon Christopherson, David Carino, Wayne Ferson
1st Edition
0071496653, 978-0071496650
