Sheet1

EquityMultiplesfromaDDM
EnterthefollowinginputsforthetwostageDDM(IfyouareusingFCFE,computethep
CurrentInputs
CurrentEarnings $11,041.00 (in$pershare)

Bookvalueofequity $51,713.00 ROE=

Revenues= $10.00

HighGrowthPeriod
Lengthofhighgrowthperiod(n)= 5 (Numberofperiods)
Growthrateduringperiod(g)= 7.94% (inpercent) ExpectedROE=
Payoutratioduringperiod(_)= 62.810% (inpercent)

CostofEquityduringperiod= 6.90% (inpercent)

StableGrowthPeriod
Growthrateinsteadystate= 2.50% (inpercent)

Payoutratioinsteadystate= 75.00% (inpercent) ExpectedROE=

CostofEquityinsteadystate= 6.90% (inpercent)

Output

ValueofEquity= $238,171.40

Price/EarningsRatio= 21.57

Price/BookValueRatio= 4.61

Price/SalesRatio= 23817.14

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singFCFE,computethepotentialpayoutratio=1FCFE/NetIncome)

21.35%

21.35%

10%

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