Rules of conduct:

This is an individual assignment. You may work with other students to retrieve data and discuss your findings, but the write-up must be entirely your own.

Turn in a printed, one or two page memo (single spaced, properly formatted) at the start of class on Tuesday, October 4 that addresses the following:

1. Compare the valuation from the Dividend Discount model with the market price of the stock. What accounts for the difference? What growth rate in EPS, DPS, or what terminal P/E is needed to equate the estimated value with the market price? Does this new assumption seem reasonable, given the historical experience?

2. Pick one of the other three valuation models (Free Cash Flow, EV/EBITDA, or the P/E model on the Price Multiples tab) and compare the valuation from the model with the market price of the stock. What accounts for the difference? What change is assumptions is needed to equate the estimated value with the market price? Does this new assumption seem reasonable, given the historical experience?