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Implied Risk Premium Calculator: Intrinsic Value Estimate

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José Manuel Esteban
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10 views

Implied Risk Premium Calculator: Intrinsic Value Estimate

Uploaded by

José Manuel Esteban
Copyright
© © All Rights Reserved
Available Formats
Download as XLS, PDF, TXT or read online on Scribd
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Sheet1

Implied Risk Premium Calculator


Enter level of the index = 1418.3
Enter current dividend yield = 3.75%
Enter expected growth rate in earnin 6.00%
Enter current long term bond rate = 4.70%
Enter risk premium = 4.91%
Enter expected growth rate in the lo 4.70%

Intrinsic Value Estimate


1 2 3 4 5
Expected Dividends $ 56.38 $ 59.76 $ 63.35 $ 67.15 $ 71.18
Expected Terminal Value = $ 1,517.73
Present Value = $ 51.43 $ 49.74 $ 48.10 $ 46.52 $ 1,004.26
Intrinsic Value of I $ 1,200.06
Implied Risk Premium
Implied Risk Premium in current lev 4.16% (Go under Tools and choose Solver: See below)

1 2 3 4 5
Expected Dividends $56.38 $59.76 $63.35 $67.15 $71.18 $75.80
Expected Terminal Value = $ 1,792.42
Present Value = $ 51.79 $ 50.43 $ 49.11 $ 47.82 $ 1,219.15
Intrinsic Value of I $ 1,418.30

This is a picture of the solver option, with the inputs that I used (Do not try to enter numbers in it).
Enter current level of index where you see 759.64.

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