Comcast Corporation CMCSA Firm Estimate a firm\'s equity vale per share: Fill in
ID: 2797503 • Letter: C
Question
Comcast Corporation CMCSA Firm Estimate a firm's equity vale per share: Fill in the Use the given Hata to do the calculations. Turn in a hard copy of this exercise when you Ticker color cells Stock price per share Dividend per share 37.4 0.55 current current come to thd regular exam One-stage model: growing perpetuity forecastgrowth rate forecast 8.00% annual growth rate of future dividends 9.80% cost of equity Equity value per share estimate equity value per share based on future dividends Iwo-stage model: Ist stage (5 years) and stable stage (growing perpetuity) growth rate cost of equity Ist stage 15.00% 9.80% stable 600% annual growth rates of future dividends 8.00% forecast forecast 0 stable dividend per share terminal value 0.55 equity value per share estimate equity value per share based on future dividendsExplanation / Answer
A)Equity value per share = D1/Ke-g
D1 = 0.55(1.08) = 0.594
Value of share = 0.594/(0.098-0.08) = $33
B)
Dividend is growing at 15%
Year Dividend Pvf @ 9.8 Disc CF 0 0.55 1 1 0.6325 0.910747 0.576047 2 0.727375 0.82946 0.603328 3 0.836481 0.755428 0.631901 4 0.961953 0.688003 0.661827 5 1.106246 0.626597 0.693171 5 58.63105 0.626597 36.73804 39.90431 Terminal value at year 5 = D6/Ke-g 1.106246(1.06)/0.08-0.06 58.63105