Inputs for GE beta mkt_prem rf k_equity term_gwth Value line forecasts of annual dividends 1.1 0.08 0.029 0.1170 0.094 Transitional period with slowing dividend growth Beginning of constant growth period Year 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Dividend 3.12 3.38 3.64 3.90 4.19 4.51 4.86 5.25 5.68 6.15 6.68 7.27 7.93 8.66 9.47 10.36 Div growth Term value 0.0740 0.0760 0.0780 0.0800 0.0820 0.0840 0.0860 0.0880 0.0900 0.0920 0.0940 0.0940 E17*(1+ F17)/(B5 - F17) 492.73 Investor CF 3.12 3.38 3.64 3.90 4.19 4.51 4.86 5.25 5.68 6.15 6.68 7.27 7.93 8.66 9.47 503.09 118.98 = PV of CF NPV(B5,H2:H17)
Inputs for GE beta mkt_prem rf k_equity term_gwth Value line forecasts of annual dividends 1.1 0.08 0.029 0.1170 0.094 Transitional period with slowing dividend growth Beginning of constant growth period Year 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Dividend 3.12 3.38 3.64 3.90 4.19 4.51 4.86 5.25 5.68 6.15 6.68 7.27 7.93 8.66 9.47 10.36 Div growth Term value 0.0740 0.0760 0.0780 0.0800 0.0820 0.0840 0.0860 0.0880 0.0900 0.0920 0.0940 0.0940 E17*(1+ F17)/(B5 - F17) 492.73 Investor CF 3.12 3.38 3.64 3.90 4.19 4.51 4.86 5.25 5.68 6.15 6.68 7.27 7.93 8.66 9.47 503.09 118.98 = PV of CF NPV(B5,H2:H17)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
This is the 3rd time I am submitting this, hopefully someone can figure it out
Transcribed Image Text:Inputs for GE
beta
mkt_prem
rf
k_equity
term_gwth
Value line
forecasts of
annual dividends
1.1
0.08
0.029
0.1170
0.094
Transitional period
with slowing dividend
growth
Beginning of constant
growth period
Year
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
Dividend
3.12
3.38
3.64
3.90
4.19
4.51
4.86
5.25
5.68
6.15
6.68
7.27
7.93
8.66
9.47
10.36
Div growth
0.0740
0.0760
0.0780
0.0800
0.0820
0.0840
0.0860
0.0880
0.0900
0.0920
0.0940
0.0940
E17*(1+ F17)/(B5 - F17)
Term value
492.73
Investor CF
3.12
3.38
3.64
3.90
4.19
4.51
4.86
5.25
5.68
6.15
6.68
7.27
7.93
8.66
9.47
503.09
118.98 PV of CF
NPV(B5,H2:H17)
Transcribed Image Text:Calculate the intrinsic value of Rio Tinto 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 10.30%. (Round your answer to 2 decimal places.)
X Answer is complete but not entirely correct.
$ 174.05 X
Intrinsic value
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