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QUESTION

The actual price of Walmart stock is $53.48 at the time of time of the case.using the required return obtained using the CAPM, find the price calculated using the:a) Perpetual Dividend Model.b) One pe

The actual price of Walmart stock is $53.48 at the time of time of the case.

using the required return obtained using the CAPM, find the price calculated using the:

a) Perpetual Dividend Model.

b) One period model (i.e. discounting only one year only forecasts of future selling price and dividends).

c) The P/E multiple approach.

Note that you will have three estimates of the price, one each for models a to c. Note that your calculated prices will NOT be $53.48 ; do not be alarmed if they are up to $7 off.

Please use Excel to do the calculations and label the inputs you use very clearly. Turn in Excel sheet as appendix to a brief report ( 1-2 pages ) explaining the models and approaches you used.

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