B. Valuation of Common Stock

• 1. Dividend Valuation Model

  • a. Example

• 2. Using the CAPM Process

  • a. Assumptions
    • 1. km = rate of return on the market
    • 2. Rf = return on the risk free asset
    • 3. km - Rf = Market Risk Premium
  • b. Example

Previous slide

Next slide

Back to first slide

View graphic version