The company name is Costco Wholesale Estimate cost of equity Select...
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Finance
The company name is Costco Wholesale
Estimate cost of equity
Select a model for estimating cost of equity, e.g. CAPM
Research input values required by the selected model
Compute cost of equity
Estimate terminal value
Select a model for estimating terminal value
Research input values required by the selected model
Compute terminal value
Estimate value of equity
Combine terminal value with free cash flows to equity from the last assignment to determine total cash flows to equity for your target company
Estimate the value of equity by computing the present value of total cash flows to equity using the cost of equity as the discount rate
Compute the estimated price per share
Scenario analysis
Propose best case and worst case scenarios
Compute the value of equity (total and per share) in each scenario
Sensitivity analysis
Identify input variable(s) that you consider would have the greatest impact on the estimate equity value
Perform sensitivity analysis (e.g. using Data Table in Excel) and compute estimated value of equity per share at different levels of these input variable(s)
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