What do you think about the disparity

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Reference no: EM133270179

Question - In this discussion, I want you to select a company from the stock market. Try to select a stock from a big recognized company, maybe that is part of the S&P 500. Try to get information from Yahoo Finance or Reuters to estimate the company's value using the Dividend Discount Model. Please, estimate the next dividend, the cost of equity, and the growth rate. The company you select should pay dividends currently. Use the CAPM to estimate the cost of equity, using a market risk premium of 5.5 percent, a risk-free rate of about 3 percent, and the stock's beta. Once you have the value (let us know), compare that value to the stock's current price.

What do you think about the disparity, if any? What do you think are the main drivers of value in your company? What do you think are the most difficult variables to estimate to value the company more accurately? Use the corporate valuation model to help to answer these questions.

Reference no: EM133270179

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