Financial Analysis Exercise 3
Step 1. Choose 3 stock companies:
The companies I choose were Apple, Facebook and Netflix. Which are all companies I use
on a daily basis.
Step 2. The 3 methods I used were the Gordon Model, the Dividend Discount price nd the P/E
Ratio. Belo you will see each equation and its calculations fore each company and method.
Apple:
Gordon growth model
g = 100 × (P0 × r – D0) ÷ (P0 + D0)
= 100 × ($207.53 × 15.32% – $2.40) ÷ ($207.53 + $2.40) = 14.00%
where:
P0 = current price of share of Apple’s common stock
D0 = last year dividends per share of Apple’s common stock
r = required rate of return on Apple’s common stock
Apple’s Dividend Discount Price
Facebook
Dividend: Historical dividend payout and yield for Facebook (FB) since 1971. The current TTM
dividend payout for Facebook (FB) as of August 10, 2018 is $0.00. The current dividend yield
for Facebook as of August 10, 2018 is 0.00%. Basically Facebook does not pay dividends.
P/E ratio: Current and historical price to earnings ratio for Facebook (FB) from 2009 to 2018.
