Inputs for GEbetamkt_premrfk_equityterm_gwthValue lineforecasts ofannual dividends1.10.080.0290.11700.094Transitional periodwith slowing dividendgrowthBeginning of constantgrowth periodYear2019202020212022202320242025202620272028202920302031203220332034Dividend3.123.383.643.904.194.514.865.255.686.156.687.277.938.669.4710.36Div growth0.07400.07600.07800.08000.08200.08400.08600.08800.09000.09200.09400.0940E17*(1+ F17)/(B5 - F17)Term value492.73Investor CF3.123.383.643.904.194.514.865.255.686.156.687.277.938.669.47503.09118.98 PV of CFNPV(B5,H2:H17) Calculate the intrinsic value of Rio Tinto in each of the following scenarios by using the three-stage growth model of Spreadsheet 18.1;Treat each scenario independently.a. The terminal growth rate will be 10.30%. (Round your answer to 2 decimal places.)X Answer is complete but not entirely correct.$ 171.33 XIntrinsic valueb. Rio Tinto's actual beta is 1.05. (Round your answer to 2 decimal places.)Answer is complete but not entirely correct.Intrinsic value$ 141.48c. The market risk premium is 9.50%. (Round your answer to 2 decimal places.)

The intrinsic value of a share is the estimated true value of a company's stock based on its…

Calculate the intrinsic value of Rio Tinto in each of the following scenarios by using the three-stage growth model of Spreadsheet 18.1 Treat each scenario independently. a. The terminal growth rate will be 10.30%. (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Intrinsic value $ 171.33 X b. Rio Tinto's actual beta is 1.05. (Round your answer to 2 decimal places.) > Answer is complete but not entirely correct. $ 141.48 X c. The market risk premium is 9.50%. (Round your answer to 2 decimal places.)

Calculate the intrinsic value of Rio Tinto in each of the following scenarios by using the three-stage growth model of Spreadsheet 18.1 Treat each scenario independently. a. The terminal growth rate will be 10.30%. (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Intrinsic value $ 171.33 X b. Rio Tinto's actual beta is 1.05. (Round your answer to 2 decimal places.) > Answer is complete but not entirely correct. $ 141.48 X c. The market risk premium is 9.50%. (Round your answer to 2 decimal places.)

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter12: Corporate Valuation And Financial Planning

Section12.6: Additional Funds Needed (afn) Equation Method

Problem 5ST

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