Sheet1

Equity Multiples from a DDM

Enter the following inputs for the two-stage DDM (If you are using FCFE, compute the po
Current Inputs
Current Earnings $11,041.00 (in $ per share)

Book value of equity $51,713.00 ROE = 21.35%

Revenues = $10.00

High Growth Period

Length of high-growth period (n) 5 (Number of periods)
Growth rate during period (g) = 7.94% (in percent) Expected ROE = 21.35%
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 = 10%
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

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 Sheet1

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

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