Discuss & explain how to estimate the intrinsic value of a company using the present value of dividends model (please be thorough in your discussion.
Questions:
1. Please discuss & explain how to estimate the intrinsic value of a company using the present value of dividends model (please be thorough in your discussion; be sure to discuss how estimate g (the growth rate) and k (the required rate of return). Please provide an example with numerical values.(3 and half pages)
2.Please discuss & explain how to estimate the intrinsic value of a company using the free cash flow to the firm (FCFF) model by Damodaran ((please be thorough in your discussion; be sure to discuss how estimate g (the growth rate) and WACC (the weighted average cost of capital)). Please provide an example with numerical values.. Be sure to discuss the WACC and the measure of free Cash flows. ( 3 & half pages)
3. What are the differences between question 1 & 2? That is, what are the differences and similarities between the dividend discount model and free cash flow to the firm model? ( 2 pages)
4. Please discuss the P/E ratio approach for deriving the intrinsic value of a company . ( 3 pages)
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