DISNEYS NUMBERS Use the following information on Disney to answer the case questions. Disneys...
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DISNEYS NUMBERS Use the following information on Disney to answer the case questions. Disneys current stock price is $140.00 per share. The average growth rate of the companys dividend has been 17.7% from 2004 through 2018. Disneys return on equity is 28.0% and the company retains approximately 80.0% of its profits while paying out the remaining 20.0% in dividends. The companys stock currently trades at 21.21 times its current year earnings estimate of $6.60 per share. Analysts expect the company to earn $6.19 per share in 2020 and $6.93 in 2021. Disneys peers in media networks trade at 25.5 times their current year earnings estimates while peers in parks, experiences and consumer products at 21.9; studio entertainment at 19.1 and DTCI at 14.1. Assume the expected return for Disneys stock is 6.9%.
What is Disney stocks intrinsic value using the Constant Growth Model?
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