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Microsoft Excel LibreOffice Calc inc. (CRM)

Dividend Discount Model (DDM)

Difficulty: Intermediate

In discounted cash flow (DCF) valuation techniques the value of the stock is estimated based upon present value of some measure of cash flow. Dividends are the cleanest and most straightforward measure of cash flow because these are clearly cash flows that go directly to the investor.

Intrinsic Stock Value (Valuation Summary) inc., dividends per share (DPS) forecast

Stock valuation by this method is not possible because prior year DPS is equal to zero.


Microsoft Excel LibreOffice Calc
Year Value DPSt or Terminal value (TVt) Calculation Present value at hidden
0 DPS01 hidden
1 DPS1 hidden = hidden × (1 + hidden) hidden
2 DPS2 hidden = hidden × (1 + hidden) hidden
3 DPS3 hidden = hidden × (1 + hidden) hidden
4 DPS4 hidden = hidden × (1 + hidden) hidden
5 DPS5 hidden = hidden × (1 + hidden) hidden
5 Terminal value (TV5) hidden = hidden × (1 + hidden) ÷ (hiddenhidden) hidden
Intrinsic value of inc.’s common stock (per share) $hidden
Current share price $hidden

Based on: 10-K (filing date: 2019-03-08).

1 DPS0 = Sum of the last year dividends per share of inc.’s common stock. See details »

Valuation is based on standard assumptions. There may exist specific factors relevant to stock value and omitted here. In such a case, the real stock value may differ significantly form the estimated. If you want to use the estimated intrinsic stock value in investment decision making process, do so at your own risk.

Required Rate of Return (r)

Microsoft Excel LibreOffice Calc
Rate of return on LT Treasury Composite1 RF hidden
Expected rate of return on market portfolio2 E(RM) hidden
Systematic risk of inc.’s common stock βCRM hidden
Required rate of return on inc.’s common stock3 rCRM hidden

1 Unweighted average of bid yields on all outstanding fixed-coupon U.S. Treasury bonds neither due or callable in less than 10 years (risk-free rate of return proxy).

2 See details »

3 rCRM = RF + βCRM [E(RM) – RF]
= hidden + hidden [hiddenhidden]
= hidden

Dividend Growth Rate (g)

Company does not pay dividends.