You decide to value Molson Coor's stock (ticker TAP) using the dividend discount model (DDM). To accomplish, you must first develop a dividend growth rate for a "high-growth period". If TAP's (annual) dividends in 2016 were $1.64 and in 2019 were $1.96, you decide this compound annual growth rate (CAGR) will be appropriate for the high growth period. (FYI you do not use 2020's dividend as it was reduced due to the pandemic.) You then confer with colleagues and through your research, agree that a 4.0% long-term (dividend) growth rate is appropriate as a constant growth rate after the high-growth period. As the last dividend (fiscal 2020) was reduced as stated, you estimate the next (annualized, fiscal 2021) dividends to be $1.71. You believe that this will grow by the high-growth CAGR for the next two years and thereafter, the growth rate will be constant (at the rate previously cited). If the capital asset pricing model (CAPM) shows TAP's cost of equity to be 5.42% calcuate the value of the stock using the DDM. Explain any differenence in value between your DDM price and the current market price of TAP.Provide a snapshot of your work or an Excel file, submit here in Blackboard via "File Submission"
You decide to value Molson Coor's stock (ticker TAP) using the
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