Given this, Josh believes that the company’s technological advantage will last only for the next 5 years. After that period, the company’s growth will likely slow to the industry growth average. Additionally, Josh believes that the required return used by the company is too high. He believes the industry average required return is more appropriate. Under this growth rate assumption, what is your estimate of the stock price?

Excel formulas needed for this worksheet

We can calculate the price by using the discounted cash flow method and the return required. Assuming that growth rates slow to the average for the industry after 5 years, the estimated stock price is around 90 dollars. The stock price is estimated by discounting the future cash flows of dividends and capital gain over a 5-year period at an annual return equal to required returns. These discounted cash flow amounts represent our estimate of stock value for the company. which are essential to a country’s development – education , healthcare, and infrastructure. They each have their own benefits, as outlined in the above list. However, when they are combined together they can create a much greater impact. Therefore, investments made in these areas can lead to lasting & meaningful changes for societies domestically & internationally.