Business, 05.05.2020 18:45 acamiyah

Stock valuation via discounted dividend model: Use constant growth model or non-constant growth model to estimate the intrinsic stock value. Use CAPM to determine the required return. Explain how you estimate the risk-free rate, market risk premium (in CAPM), and dividend growth rates (in stock valuation model). (Hint: Annualize the required return on the stock, aggregate the quarterly dividends into annual ones, and perform the analysis on annual basis. You may try to begin with assuming the 60-month average of SHY as the risk- free rate, and the 60-month average of SPY as the expected market return; alternatively, you may consider other inputs for CAPM.

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Stock valuation via discounted dividend model: Use constant growth model or non-constant growth mode...

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