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Project part III - Dividend-discount model for current share price vs. market price




Question;Part Two;Determine the WACC for the Firm;Calculate;your ?best? estimate of the Weighted Average Cost of Capital (WACC) for the;firm. In order to complete this task, you will need to do the following;Determine;the cost of debt:Please explain the approach and;procedure you use to make this determination.;Determine;the cost of equity: Please explain the approach and;methodology you use in making this determination.;Determine;the capital structure of the firm;Determine the market value of the firm?s debt and equity.;Explain;your result and discuss how the firm will use the WACC.;Part Three;Determine;the Value of Your Firm?s Equity;We will use;the Dividend-Discount Model to determine the firm?s equity ? i.e., it will give;us the current price of a share of stock. We will use this model to estimate;the value of a share of your firm?s stock and compare this estimate to the;current market value of this firm?s stock.Estimate the;firm?s stock price using the Dividend-Discount Model;Use an;investment source ?, to find the following information;Current dividend;ii. Analysts;estimated growth rate for the next 5-10 years;Use your estimate of the cost of;equity in the WACC for therE;part of your formulaCombine the;above information into the Dividend-Discount Model;Compare your;result to the current market price of your firm?s stock. Describe, discuss, and;analyze how they compare. Based on your knowledge of finance, how would you;explain any differences you observe?;Notes;Whole Foods Market (WFM) is the firm to be usedI?ve;added back in the WACC provided from previous question last week that you;helped me with (see PART II below for cost of equity)


Paper#42144 | Written in 18-Jul-2015

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