Business Valuation Final Project

Cost of Capital (re)

9.69%

  Beta

1.21

  rf

2.28%

  rm

8.40%

Terminal Value Assumption

3

[See page 2 for TV codes]

Current Market Price

93.90

Current Book Value

48655

Current Shares Outstanding

1661

Current Dividends

3063

Current Comprehensive Income

8322

One-Year Ahead EPS Forecast

5.77

Two-Years Ahead EPS Forecast

6.04

Five year EPS Growth Rate

10.48%

Dividend Payout Ratio

36.81%

2015 [A]

2016 [F]

2017 [F]

2018 [I]

2019 [I]

2020 [I]

EPS

5.77

6.04

6.67

      7.37

8.14

DPS

2.12

2.22

2.46

2.71

3.00

BPS

29.29

32.94

36.76

40.97

45.63

50.77

Residual Earnings (RE)

2.93

2.85

3.108

3.40

3.72

Discount Rate (1 + re)t

1.097

1.203

1.319

1.448

1.588

PV of Residual Earnings

2.67

2.37

2.36

2.35

2.34

Total PV of RE: 2016-2020

12.09

Terminal Value

57.27

PV of Terminal Value

36.07

Value Per Share

77.45

Cost of Capital (re)

9.69%

  Beta

1.21

  rf

2.28%

  rm

8.40%

Terminal Value Assumption

2

[See page 2 for TV codes]

2015 [A]

2016 [F]

2017 [F]

2018 [I]

2019 [I]

2020 [I]

DPS

2.12

2.22

2.46

2.71

3.00

EPS

5.77

6.04

6.67

7.37

8.14

DPS reinvested (re × DPSt–1)

.205

.215

.238

.262

Cum-dividend earnings

6.245

6.885

7.61

8.40

Normal earnings [(1 + re) × EPSt–1]

6.33

6.63

7.32

8.08

Abnormal earnings growth (AEG)

-.085

.255

.29

       .32

Discount Rate (1 + re)t

1.097

1.203

1.319

1.448

PV of AEG

-.077

        .212

.220

.221

Total PV of AEG: 2017-2020

.576

Terminal Value

1.667

PV of Terminal Value

1.152

Total earnings to be capitalized

7.498

Capitalization rate (re)

.0969

Value Per Share

77.38