Sheet1

Equity Multiples from a DDM 
Enter the following inputs for the two­stage DDM (If you are using FCFE, compute the p
Current Inputs

Current Earnings $11,041.00  (in $ per share)

Book value of equity $51,713.00  ROE =

Revenues = $10.00 
High Growth Period

Length of high­growth period (n) = 5  (Number of periods)
Growth rate during period (g) = 7.94% (in percent) Expected ROE =
Payout ratio during period (_) = 62.810% (in percent)

Cost of Equity during period  = 6.90% (in percent)

Stable Growth Period

Growth rate in steady state = 2.50% (in percent)

Payout ratio in steady state = 75.00% (in percent) Expected ROE =

Cost of Equity in steady state = 6.90% (in percent)

Output

Value of Equity  = $238,171.40 

Price/Earnings Ratio = 21.57

Price/Book Value Ratio = 4.61

Price/Sales Ratio = 23817.14

Page 1
 Sheet1

sing FCFE, compute the potential payout ratio = 1­ FCFE/ Net Income)

21.35%

21.35%

10%

Page 2