| Latest Forum Topics / Others |
 Post Reply
|
|
CAPM/Dividend Growth Model
|
|||
|
tedlim_me
Senior |
14-Oct-2009 19:09
Yells: "there is no equity in the equity markets" |
||
|
x 0
x 0 Alert Admin |
bro.. pm me if anything.. seems like only the both of us r conversing on this topic.. dun wanna take up bandwidth.. 
|
||
| Useful To Me Not Useful To Me | |||
|
tedlim_me
Senior |
14-Oct-2009 18:24
Yells: "there is no equity in the equity markets" |
||
|
x 0
x 0 Alert Admin |
oh u're doing a proj.. okokk.. proj means finance theories.. you may want to search arnd for the 'sustainable growth rate' which supports the gordon growth model stock valuation..
tt wld give u, g = (net income-div)/net income * net income/sales * sales/assets * assets/shareholders' equity in short, g = earnings retention rate (i.e. 1-div payout ratio) * ROE..
this calculation of g supports the constant growth model for stock valuation i.e. gordon growth model..
may wanna google it for further elaboration..
|
||
| Useful To Me Not Useful To Me | |||
|
|
|||
|
chinton86
Veteran |
14-Oct-2009 17:34
|
||
|
x 0
x 0 Alert Admin |
For my project i need to reference some where to say y 5.5% leh | ||
| Useful To Me Not Useful To Me | |||
|
tedlim_me
Senior |
14-Oct-2009 17:27
Yells: "there is no equity in the equity markets" |
||
|
x 0
x 0 Alert Admin |
comes frm investor's own estimation.. finance bks or papers wld say anywhere between 5% to 8% would be a gd gauge.. i'd use 5.5% to 6% for a gd gauge..
|
||
| Useful To Me Not Useful To Me | |||
|
chinton86
Veteran |
14-Oct-2009 17:24
|
||
|
x 0
x 0 Alert Admin |
where can we get the projected growth rate? Or is i assume anyhow? | ||
| Useful To Me Not Useful To Me | |||
|
|
|||
|
tedlim_me
Senior |
14-Oct-2009 17:17
Yells: "there is no equity in the equity markets" |
||
|
x 0
x 0 Alert Admin |
oh 1 more thing... reason being that required rate of return cannot be less than the projected growth rate.. 
|
||
| Useful To Me Not Useful To Me | |||
|
tedlim_me
Senior |
13-Oct-2009 21:17
Yells: "there is no equity in the equity markets" |
||
|
x 0
x 0 Alert Admin |
tt is true unless u subscribe to credit rating firms.. but sg govt bonds provide yields tt are way too low to actually 'more accurately' portray the stock's expected price.. sorry for the late reply..
|
||
| Useful To Me Not Useful To Me | |||
|
chinton86
Veteran |
13-Oct-2009 12:41
|
||
|
x 0
x 0 Alert Admin |
By finding the basket of AAA bond seems to be difficult as compare to 10 government bond right? Thanks....U helps. |
||
| Useful To Me Not Useful To Me | |||
|
|
|||
|
tedlim_me
Senior |
13-Oct-2009 08:33
Yells: "there is no equity in the equity markets" |
||
|
x 0
x 0 Alert Admin |
btw bro.. i'm not sure where where u can get risk premium.. risk premium = risk free rate - growth rate... growth rate is supposed to be ur own estimation.. risk free rate, get it frm the rate provided by singapore bonds.. however, if the co. has the bulk of operations of the co. is in china, use the risk free rate of china govt bonds.. Generally, use risk free rate of the particular country's 10 yr bonds (though they may be excessively deflated e.g. sg govt bonds which provides a rate that is excessively low compared to corporate bonds which provides higher returns.. so one way is to use an aggregate of a basket of AAA bonds).. i hope this helps... :) |
||
| Useful To Me Not Useful To Me | |||
|
tedlim_me
Senior |
13-Oct-2009 08:24
Yells: "there is no equity in the equity markets" |
||
|
x 0
x 0 Alert Admin |
bro.. u still can.. juz that ur denominator will be bigger i.e. required rate of return (use capm) - (- the negative growth rate)... so ur expected px for the stock will be lower.. :)
|
||
| Useful To Me Not Useful To Me | |||
|
chinton86
Veteran |
13-Oct-2009 01:31
|
||
|
x 0
x 0 Alert Admin |
Can anyone help me how to find the expected return using capm though i have a formula but where can i find the risk premium for a company: ke=Rf+B(Premium) If i have a negative growth rate for dividend, can i still use the dividend growth model to find intrisic value? |
||
| Useful To Me Not Useful To Me | |||