# FIN – Determine the Value of Your Firmâs Equity

Part Three:Determine the Value of Your Firmâs Equity:1. We will use the Dividend­Discount Model to determine the firmâs equity â i.e., it willgive us the current price of a share of stock. We will use this model to estimate the valueof a share of your firmâs stock and compare this estimate to the current market value of this firmâs stock.2. Estimate the firmâs stock price using the Dividend­Discount Model:a.Use an investment source â e.g. www.yahoofinance.com , www.morningstar.com tofind the following information:Current dividendii. Analysts estimated growth rate for the next 5­10 yearsb. Use your estimate of the cost of equity in the WACC for the rE part of your formulac. Combine the above information into the Dividend­Discount Model3. Compare your result to the current market price of your firmâs stock. Describe, discuss,and analyze how they compare. Based on your knowledge of finance, how would youexplain any differences you observe?Notes:Whole Foods Market (WFM) is the firm to be used

# FIN – Determine the Value of Your Firmâs Equity

Part Three:Determine the Value of Your Firmâs Equity:1. We will use the Dividend­Discount Model to determine the firmâs equity â i.e., it willgive us the current price of a share of stock. We will use this model to estimate the valueof a share of your firmâs stock and compare this estimate to the current market value of this firmâs stock.2. Estimate the firmâs stock price using the Dividend­Discount Model:a.Use an investment source â e.g. www.yahoofinance.com , www.morningstar.com tofind the following information:Current dividendii. Analysts estimated growth rate for the next 5­10 yearsb. Use your estimate of the cost of equity in the WACC for the rE part of your formulac. Combine the above information into the Dividend­Discount Model3. Compare your result to the current market price of your firmâs stock. Describe, discuss,and analyze how they compare. Based on your knowledge of finance, how would youexplain any differences you observe?Notes:Whole Foods Market (WFM) is the firm to be used