Dividend Discount Model Enter the ticker symbol "WMT" for Wal-Mart. Using the most recent balance sheet and income statement under the "Excel Analytics" link, calculate the sustainable growth rate for Wal-Mart. Now download the "Mthly. Adj. Price" and find the closing stock price for the same month as the balance sheet and income statement you used. What is the implied required return on Wal-Mart according to the dividend growth model? Does this number make sense? Why or why not?
Growth Opportunities Assume that investors require an 11 percent return on Harley-Davidson (HDI) stock. Under the "Excel Analytics" link find the "Mthly. Adj. Price" and find the closing price for the month of the most recent fiscal year end for HDI. Using this stock price and the EPS for the most recent year, calculate the NPVGO for Harley-Davidson. What is the appropriate PE ratio for Harley-Davidson using these calculations?
