Question
This is for Excon Mobil Risk Free rate can be 10 year T-Bond rate. If you choose a different one, then give reasons Expected return
This is for Excon Mobil
Risk Free rate can be 10 year T-Bond rate. If you choose a different one, then give reasons
Expected return on Stock market can be Long term rate of return on S&P Index. Currently about 10.5%. You may use a different rate should you choose it
Beta of the stock needs to be calculated. Use daily return on stock as Y variable, Return on S&P as X variable and calculate Slope and this is Beta. Use daily return / Monthly return for between 5 and 10 years to calculate Beta.
Once you have this, apply Dividend Growth Model to calculate stock price.
**Explain all Assumptions. Give Sources to all facts.**
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Assumptions 1 RiskFree Rate The riskfree rate can be assumed to be the yield on a 10year Treasury bond This is because Treasury bonds are considered t...Get Instant Access to Expert-Tailored Solutions
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Financial Management Theory and Practice
Authors: Eugene F. Brigham, Michael C. Ehrhardt
15th edition
130563229X, 978-1305632301, 1305632303, 978-0357685877, 978-1305886902, 1305886909, 978-1305632295
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