Impl premium calculator

Implied Risk Premium Calculator

Enter current level of index 1756.54 Dividends and Buybacks Trailing 12 mo 80.33 C Updated April 1, 2013
Do you want to use current yield(C), 5-year average(A5) or 10-yea A10 Dividends and Buybacks (Average yield- 82.35 A10
Cash yield on index (Calculated number but you can override it) 4.69% Dividends and Buybacks (Average yield- 88.21 A5 Updated April 1, 2013
Enter expected growth rate in earnings for next 5 years for market 5.59% How to use this spreadsheet (Updated at the start of each quarter)
Enter current long term bond rate = 2.55% Step 1: Update the index level (B2) and the long term bond rate (B6). Do not change any of the other inputs.
Enter risk premium = 5.00% Step 2: Open the goal seek function in excel
Enter expected growth rate in the long term = 2.55% Step 3: In the goal seek box, set cell B25 to the current value of the index by changing cell C19.

Intrinsic Value Estimate

1 2 3 4 5
Expected Dividends = $ 86.96 $ 91.82 $ 96.95 $ 102.38 $ 108.10 $ 110.86
Expected Terminal Value = $ 2,217.14
Present Value = $ 80.85 $ 79.38 $ 77.93 $ 76.52 $ 1,615.90
Intrinsic Value of Index = $ 1,930.58

Implied Risk Premium

Implied Risk Premium in current level of Index = 5.49% (Go under Tools and choose Solver: See below)

1 2 3 4 5
Expected Dividends = $86.96 $91.82 $96.95 $102.38 $108.10
Expected Terminal Value = $ 2,019.61
Present Value = $ 80.49 $ 78.66 $ 76.88 $ 75.14 $ 1,445.47
Intrinsic Value of Index = $ 1,756.64

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 Impl premium calculator

Updated April 1, 2013

Updated April 1, 2013

at the start of each quarter)
e any of the other inputs.

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 Buyback & Dividend computation

Year Dividend YieldBuybacks/Index Yield Column1

2001 1.37% 1.25% 2.62%
2002 1.81% 1.58% 3.39%
2003 1.61% 1.23% 2.84%
2004 1.57% 1.78% 3.35%
2005 1.79% 3.11% 4.90%
2006 1.77% 3.39% 5.16%
2007 1.92% 4.58% 6.49%
2008 3.15% 4.33% 7.47%
2009 1.97% 1.39% 3.36%
2010 1.80% 2.61% 4.42%
2011 2.10% 3.56% 5.66%
2012 2.19% 3.13% 5.32%
Average: Last 10 years = 4.90%
Average: Last 5 years 5.25%

Index at the start of the current quarter = 1681.55 Base for normalized Cashflow; Updated at the start of every q

Year Market value of indexDividends Buybacks Cash to equity

Dividend yield
Buyback yieldTotal yield
2001 1148.09 15.74 14.34 30.08 1.37% 1.25% 2.62%
2002 879.82 15.96 13.87 29.83 1.81% 1.58% 3.39%
2003 1111.91 17.88 13.70 31.58 1.61% 1.23% 2.84%
2004 1211.92 19.01 21.59 40.60 1.57% 1.78% 3.35%
2005 1248.29 22.34 38.82 61.17 1.79% 3.11% 4.90%
2006 1418.30 25.04 48.12 73.16 1.77% 3.39% 5.16%
2007 1468.36 28.14 67.22 95.36 1.92% 4.58% 6.49%
2008 903.25 28.45 39.07 67.52 3.15% 4.33% 7.47%
2009 1115.00 21.97 15.46 37.43 1.97% 1.39% 3.36%
2010 1257.64 22.65 32.88 55.53 1.80% 2.61% 4.42%
2011 1257.60 26.43 44.75 71.17 2.10% 3.56% 5.66%
2012 1426.19 31.25 44.65 75.90 2.19% 3.13% 5.32%
Trailing 12 month 33.22 47.11 80.33

Market Cap Index level Unit adjuster Dividends Buybacks

Trailing 12 month 296.84 420.89
2012 12742 1426.19 0.11192827 280.69 398.91
2011 11385 1257.6 0.11046113 240.20 405.08
2010 11430 1257.64 0.11002975 205.83 298.82
2009 9928 1115.00 0.11230862 195.61 137.65
2008 7852 903.25 0.11503439 247.29 339.64
2007 12868 1468.36 0.11410942 246.59 589.12
2006 12729 1418.30 0.11142274
Ratio 120.04% 123.92%
Index units adjuster =
0.1104611330698

Computing the trailing 12 month number

Quarter Dividends Buybacks
Last quarter 76.67 118.05 Updated Oct 2, 2013

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 Buyback & Dividend computation

2 quarters ago 70.86 99.97

3 quarters ago 79.83 99.15
4 quarters ago 69.48 103.72
Sum 296.84 420.89

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 Buyback & Dividend computation

ted at the start of every q Updated at the start of every quarterLast updated 1-Oct-13

Updated at the start of every quarterLast updated 1-Oct-13

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 Expected growth rate

Bottom up Estimates Top down Estimates

Year Earnings on Index Source Year
2012 102.47 Thomson-Reuters 2012
2013 10.27% 112.99 Thomson-Reuters 2013
2014 11.44% 125.92 Thomson-Reuters 2014
2015 8.48% 2015
2016 5.51% 2016
2017 2.55% 2017
Compounded averag 7.60% Compounded aver

Expected LT growth 10.57% S&P Earnings report

Thomson Reuters link:

S&P Earnings link:

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 Expected growth rate

Top down Estimates

Earnings on Index Source
99.56 S&P Operating Earnings
7.67% 107.2 S&P Operating Earnings
7.65% 115.4 Media reports
5.94%
4.24%
2.55%
5.59%

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