Year

Sales
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001

Compound growth
Required Rate

3,000
3,200
4,000
4,400
4,800
5,000
5,200
5,100
4,900
4,700
5.11%

Net
EPS
DPS
Income
150
1.50
160
1.60
200
2.00
220
2.20
240
2.40
250
2.50
260
2.60
255
2.55
245
2.45
235
2.35
5.11%

5.11%

0.6
0.64
0.8
0.88
0.96
1
1.04
1.02
0.98
0.94

1.066667 0.066667
1.25

0.25

1.1

0.1

1.090909 0.090909
1.041667 0.041667
1.04

0.04

0.980769

-0.01923

0.960784

-0.03922

0.959184

-0.04082

5.11%

5.44%

15%

Constant Growth
Method
Constant Growth Rate
Zero Growth

Value
9.995593
0.1
6.266667
Years Cash Flows

Non-constant Growth Method

G1 (historical)
0.051
n1
2
G2 (assumed)
0.08
n2
3
G3 (industry average)
0.1
n3
infinite

1
2
3
4
5
5

0.991
1.04184422
1.12519176
1.2152071
1.31242367
48.9971502

PV
$0.86
$0.79
$0.74
$0.69
$0.65
$24.36
$28.10
Intrinsic Value

0.94

Arith. Mean