Valuation of stock through dividend model1 using

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Valuation of stock through dividend model.

1. Using Yahoo!Finance, what is MCD's current annualized dividend amount? When was its last quarterly dividend paid?

2. Using Yahoo! Finance, what is the estimated annual rate of EPS growth for MCD over the next 5 years?

3. Using the results from Questions 1 and 2, construct a 2-stage valuation model for MCD's stock. Assume that MCD's long-run expected growth rate is 3%, and that the company's cost of equity is 8%. Show each of the following results.

1. Expected dividends in years 1 - 5

2. Terminal value of stock at end of 5 years

3. Current value of stock

Reference no: EM13356916

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