Use the following information on Disney to answer the case questions: Disney's current stock price...

50.1K

Verified Solution

Question

Accounting

image

Use the following information on Disney to answer the case questions: Disney's current stock price is $140.00 per share. The aver- age growth rate of the company's dividend has been 17.7% from 2004 through 2018. Disney's 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 company's 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. Disney's 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 Disney's stock is 6.9%. What is Disney stock's intrinsic value using each of the four models? -Constant Growth Model -Multi-Stage Growth Model -Discounted Dividend Model -Market Multiples Approach

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students