D Current dividend per share, $ 0.

00
r stock Cost of equity (Opportunity cost), % 0.00%
g long-term Long-term dividend growth rate, % 0.00%
g short-term Short-term dividend growth rate, % 0.00%
n short-term Length of short-term period, years 0
g mid-term Mid-term dividend growth rate, % 0.00%
n mid-term Length of mid-term period, years 0
Stock value 0.00
Number of Shares 0
Company value 0.00
r f Risk-free interest rate, % 0.00%
r m Market risk, % 0.00%
stock Beta of a stock 0.0000
r stock Cost of equity (Opportunity cost) 0.00%
1
2
3 Time Dividends PV
4 1 0.00 0
5 2 0.00 0
6 3 0.00 0
7 4 0.00 0
8 5 0.00 0
9 6 0.00 0
10 7 0.00 0
8 0.00 0
9 0.00 0
10 0.00 0
Cost of Equity (Opportunity Cost) Calculator - CAPM
Data Input
10
Number of periods
Discounted Dividend Valuation
Results
Manual Model Type Go back to Inputs
Model Type
One-Stage Go to table
r
stock
Calculation Method
0.00% Manual
Growth Rate Drop
Instantly
10
Number of periods
Go back to Inputs
Instructions
This is a discounted dividend valuation model. This model will help you to calculate a fair price for the stock,
taking into account various parameters.
Template is based on Dividend Discount Model (DDM). DDM is a procedure for valuing the price of a stock by
using predicted dividends and discounting them back to present value. The idea is that if the value obtained
from the DDM is higher than what the shares are currently trading at, then the stock is undervalued.

Template provides an opportunity to choose between four different model types: One-Stage model, Two-
Stage model, Three-Stage model and Manual model. Further you can find description for each model type:
1) One-Stage or Gordon Growth model: assumes that dividends grow indefinitely at a constant rate.
2) Two-Stage model: two common versions of the two-stage DDM exist. The first model assumes a
constant growth rate in each stage, as 15% in stage one and 7% in stage two (Instant growth rate
drop). The second model assumes a declining dividend growth rate in stage one followed by a fixed
growth rate in stage two (Gradual growth rate drop).
3) Three-Stage model: there are also two popular versions of this type of model. In the first version,
the company is assumed to have a constant dividend growth rate in each of the three stages. For
example, Stage 1 could assume 20% growth for 3 years, Stage 2 could have 10% growth for four
years, and Stage 3 5% growth rate thereafter (Instant growth rate drop). In the second version, in
the middle (second) period, the growth rate is assumed to decline linearly (Gradual growth rate
drop).
4) Manual model: in this model you should manually put a dividend per share for a certain number of
years. After you put these values, model will calculate dividend cash flow and discount it back to
present value, thus defining a stock value.

Key terms for this template:
D Current dividend per share in $
r stock Cost of equity (Opportunity cost) or Expected rate of return on a certain asset in %
g Dividend growth rate in %. There can be g short-term, g mid-term, and g-long-term, depending on
model type chosen.
n Length of the period in years. There can be n short-term and n mid-term, depending on model
type chosen.


To start working with this template:
Choose the appropriate model type from the drop-down list in cell H3;
Type data required in table Data Input;
r stock this rate can be defined in two ways. The first option is to write this value manually in cell D6.
The second option is to calculate this rate, using Capital Asset Pricing Model (CAPM). If you want to
calculate the rate, using this model, chosse CAPM from the drop-down list in cell H6 (otherwise leave
this cell Manual).
After CAPM is chosen in cell H6, additional table Cost of Equity (Opportunity Cost) Calculator - CAPM
appears. Fill in the table with appropriate values:
r f is the risk-free rate of interest (in %) such as interest arising from government bonds
r m - the expected market rate of return in %;
stock - the sensitivity of the expected asset returns to the expected market returns.
After these values are typed, r stock will be calculated automatically and used to define the stock value.
If youve chosen Two-Stage or Three-Stage model type in cell H3, you can choose the type of the growth
rate drop from the drop-down list in cell H9. Both types are described at the beginning of the
instructions. Depending on the type, additional rows in Data Input table will appear. Fill them with
appropriate values.
If youve chosen Manual model type in cell H3, you can click on the cell Go to Table that will appear in
cell J3. You should choose the appropriate number of years for calculation from the drop-down list in cell
E33. After that, type the dividend per share for each period in table Manual Model Type. After you type
values, click on the cell Go back to Inputs to return to the beginning of the worksheet.

After all values are put into appropriate tables, stock value will be calculated automatically in cell D16.
You can also enter the number of shares in cell D17, and template will automatically calculate the
company value (multiplying stock value by the number of shares).


To start working with this template:
Choose the appropriate model type from the drop-down list in cell H3;
Type data required in table Data Input;
r stock this rate can be defined in two ways. The first option is to write this value manually in cell D6.
The second option is to calculate this rate, using Capital Asset Pricing Model (CAPM). If you want to
calculate the rate, using this model, chosse CAPM from the drop-down list in cell H6 (otherwise leave
this cell Manual).
After CAPM is chosen in cell H6, additional table Cost of Equity (Opportunity Cost) Calculator - CAPM
appears. Fill in the table with appropriate values:
r f is the risk-free rate of interest (in %) such as interest arising from government bonds
r m - the expected market rate of return in %;
stock - the sensitivity of the expected asset returns to the expected market returns.
After these values are typed, r stock will be calculated automatically and used to define the stock value.
If youve chosen Two-Stage or Three-Stage model type in cell H3, you can choose the type of the growth
rate drop from the drop-down list in cell H9. Both types are described at the beginning of the
instructions. Depending on the type, additional rows in Data Input table will appear. Fill them with
appropriate values.
If youve chosen Manual model type in cell H3, you can click on the cell Go to Table that will appear in
cell J3. You should choose the appropriate number of years for calculation from the drop-down list in cell
E33. After that, type the dividend per share for each period in table Manual Model Type. After you type
values, click on the cell Go back to Inputs to return to the beginning of the worksheet.

After all values are put into appropriate tables, stock value will be calculated automatically in cell D16.
You can also enter the number of shares in cell D17, and template will automatically calculate the
company value (multiplying stock value by the number of shares).

Instructions
This is a discounted dividend valuation model. This model will help you to calculate a fair price for the stock,
taking into account various parameters.
Template is based on Dividend Discount Model (DDM). DDM is a procedure for valuing the price of a stock by
using predicted dividends and discounting them back to present value. The idea is that if the value obtained
from the DDM is higher than what the shares are currently trading at, then the stock is undervalued.

Template provides an opportunity to choose between four different model types: One-Stage model, Two-
Stage model, Three-Stage model and Manual model. Further you can find description for each model type:
1) One-Stage or Gordon Growth model: assumes that dividends grow indefinitely at a constant rate.
2) Two-Stage model: two common versions of the two-stage DDM exist. The first model assumes a
constant growth rate in each stage, as 15% in stage one and 7% in stage two (Instant growth rate
drop). The second model assumes a declining dividend growth rate in stage one followed by a fixed
growth rate in stage two (Gradual growth rate drop).
3) Three-Stage model: there are also two popular versions of this type of model. In the first version,
the company is assumed to have a constant dividend growth rate in each of the three stages. For
example, Stage 1 could assume 20% growth for 3 years, Stage 2 could have 10% growth for four
years, and Stage 3 5% growth rate thereafter (Instant growth rate drop). In the second version, in
the middle (second) period, the growth rate is assumed to decline linearly (Gradual growth rate
drop).
4) Manual model: in this model you should manually put a dividend per share for a certain number of
years. After you put these values, model will calculate dividend cash flow and discount it back to
present value, thus defining a stock value.

Key terms for this template:
D Current dividend per share in $
r stock Cost of equity (Opportunity cost) or Expected rate of return on a certain asset in %
g Dividend growth rate in %. There can be g short-term, g mid-term, and g-long-term, depending on
model type chosen.
n Length of the period in years. There can be n short-term and n mid-term, depending on model
type chosen.


To start working with this template:
Choose the appropriate model type from the drop-down list in cell H3;
Type data required in table Data Input;
r stock this rate can be defined in two ways. The first option is to write this value manually in cell D6.
The second option is to calculate this rate, using Capital Asset Pricing Model (CAPM). If you want to
calculate the rate, using this model, chosse CAPM from the drop-down list in cell H6 (otherwise leave
this cell Manual).
After CAPM is chosen in cell H6, additional table Cost of Equity (Opportunity Cost) Calculator - CAPM
appears. Fill in the table with appropriate values:
r f is the risk-free rate of interest (in %) such as interest arising from government bonds
r m - the expected market rate of return in %;
stock - the sensitivity of the expected asset returns to the expected market returns.
After these values are typed, r stock will be calculated automatically and used to define the stock value.
If youve chosen Two-Stage or Three-Stage model type in cell H3, you can choose the type of the growth
rate drop from the drop-down list in cell H9. Both types are described at the beginning of the
instructions. Depending on the type, additional rows in Data Input table will appear. Fill them with
appropriate values.
If youve chosen Manual model type in cell H3, you can click on the cell Go to Table that will appear in
cell J3. You should choose the appropriate number of years for calculation from the drop-down list in cell
E33. After that, type the dividend per share for each period in table Manual Model Type. After you type
values, click on the cell Go back to Inputs to return to the beginning of the worksheet.

After all values are put into appropriate tables, stock value will be calculated automatically in cell D16.
You can also enter the number of shares in cell D17, and template will automatically calculate the
company value (multiplying stock value by the number of shares).


To start working with this template:
Choose the appropriate model type from the drop-down list in cell H3;
Type data required in table Data Input;
r stock this rate can be defined in two ways. The first option is to write this value manually in cell D6.
The second option is to calculate this rate, using Capital Asset Pricing Model (CAPM). If you want to
calculate the rate, using this model, chosse CAPM from the drop-down list in cell H6 (otherwise leave
this cell Manual).
After CAPM is chosen in cell H6, additional table Cost of Equity (Opportunity Cost) Calculator - CAPM
appears. Fill in the table with appropriate values:
r f is the risk-free rate of interest (in %) such as interest arising from government bonds
r m - the expected market rate of return in %;
stock - the sensitivity of the expected asset returns to the expected market returns.
After these values are typed, r stock will be calculated automatically and used to define the stock value.
If youve chosen Two-Stage or Three-Stage model type in cell H3, you can choose the type of the growth
rate drop from the drop-down list in cell H9. Both types are described at the beginning of the
instructions. Depending on the type, additional rows in Data Input table will appear. Fill them with
appropriate values.
If youve chosen Manual model type in cell H3, you can click on the cell Go to Table that will appear in
cell J3. You should choose the appropriate number of years for calculation from the drop-down list in cell
E33. After that, type the dividend per share for each period in table Manual Model Type. After you type
values, click on the cell Go back to Inputs to return to the beginning of the worksheet.

After all values are put into appropriate tables, stock value will be calculated automatically in cell D16.
You can also enter the number of shares in cell D17, and template will automatically calculate the
company value (multiplying stock value by the number of shares).

Andrew Grigolyunovich, CFA
AG Capital
www.cfotemplates.com
Instructions
This is a discounted dividend valuation model. This model will help you to calculate a fair price for the stock,
taking into account various parameters.
Template is based on Dividend Discount Model (DDM). DDM is a procedure for valuing the price of a stock by
using predicted dividends and discounting them back to present value. The idea is that if the value obtained
from the DDM is higher than what the shares are currently trading at, then the stock is undervalued.

Template provides an opportunity to choose between four different model types: One-Stage model, Two-
Stage model, Three-Stage model and Manual model. Further you can find description for each model type:
1) One-Stage or Gordon Growth model: assumes that dividends grow indefinitely at a constant rate.
2) Two-Stage model: two common versions of the two-stage DDM exist. The first model assumes a
constant growth rate in each stage, as 15% in stage one and 7% in stage two (Instant growth rate
drop). The second model assumes a declining dividend growth rate in stage one followed by a fixed
growth rate in stage two (Gradual growth rate drop).
3) Three-Stage model: there are also two popular versions of this type of model. In the first version,
the company is assumed to have a constant dividend growth rate in each of the three stages. For
example, Stage 1 could assume 20% growth for 3 years, Stage 2 could have 10% growth for four
years, and Stage 3 5% growth rate thereafter (Instant growth rate drop). In the second version, in
the middle (second) period, the growth rate is assumed to decline linearly (Gradual growth rate
drop).
4) Manual model: in this model you should manually put a dividend per share for a certain number of
years. After you put these values, model will calculate dividend cash flow and discount it back to
present value, thus defining a stock value.

Key terms for this template:
D Current dividend per share in $
r stock Cost of equity (Opportunity cost) or Expected rate of return on a certain asset in %
g Dividend growth rate in %. There can be g short-term, g mid-term, and g-long-term, depending on
model type chosen.
n Length of the period in years. There can be n short-term and n mid-term, depending on model
type chosen.


To start working with this template:
Choose the appropriate model type from the drop-down list in cell H3;
Type data required in table Data Input;
r stock this rate can be defined in two ways. The first option is to write this value manually in cell D6.
The second option is to calculate this rate, using Capital Asset Pricing Model (CAPM). If you want to
calculate the rate, using this model, chosse CAPM from the drop-down list in cell H6 (otherwise leave
this cell Manual).
After CAPM is chosen in cell H6, additional table Cost of Equity (Opportunity Cost) Calculator - CAPM
appears. Fill in the table with appropriate values:
r f is the risk-free rate of interest (in %) such as interest arising from government bonds
r m - the expected market rate of return in %;
stock - the sensitivity of the expected asset returns to the expected market returns.
After these values are typed, r stock will be calculated automatically and used to define the stock value.
If youve chosen Two-Stage or Three-Stage model type in cell H3, you can choose the type of the growth
rate drop from the drop-down list in cell H9. Both types are described at the beginning of the
instructions. Depending on the type, additional rows in Data Input table will appear. Fill them with
appropriate values.
If youve chosen Manual model type in cell H3, you can click on the cell Go to Table that will appear in
cell J3. You should choose the appropriate number of years for calculation from the drop-down list in cell
E33. After that, type the dividend per share for each period in table Manual Model Type. After you type
values, click on the cell Go back to Inputs to return to the beginning of the worksheet.

After all values are put into appropriate tables, stock value will be calculated automatically in cell D16.
You can also enter the number of shares in cell D17, and template will automatically calculate the
company value (multiplying stock value by the number of shares).



If you wish to change something in this template, just order customization to your
needs at info@cfotemplates.com.

To order customization:
Think about changes that need to be made to your new template;
Send your requests and other comments to info@cfotemplates.com.
We will estimate the number of hours needed to customize your template and
we will send you a price quote.
Proceed to customization link at www.cfotemplates.com/Customization.htm.


To start working with this template:
Choose the appropriate model type from the drop-down list in cell H3;
Type data required in table Data Input;
r stock this rate can be defined in two ways. The first option is to write this value manually in cell D6.
The second option is to calculate this rate, using Capital Asset Pricing Model (CAPM). If you want to
calculate the rate, using this model, chosse CAPM from the drop-down list in cell H6 (otherwise leave
this cell Manual).
After CAPM is chosen in cell H6, additional table Cost of Equity (Opportunity Cost) Calculator - CAPM
appears. Fill in the table with appropriate values:
r f is the risk-free rate of interest (in %) such as interest arising from government bonds
r m - the expected market rate of return in %;
stock - the sensitivity of the expected asset returns to the expected market returns.
After these values are typed, r stock will be calculated automatically and used to define the stock value.
If youve chosen Two-Stage or Three-Stage model type in cell H3, you can choose the type of the growth
rate drop from the drop-down list in cell H9. Both types are described at the beginning of the
instructions. Depending on the type, additional rows in Data Input table will appear. Fill them with
appropriate values.
If youve chosen Manual model type in cell H3, you can click on the cell Go to Table that will appear in
cell J3. You should choose the appropriate number of years for calculation from the drop-down list in cell
E33. After that, type the dividend per share for each period in table Manual Model Type. After you type
values, click on the cell Go back to Inputs to return to the beginning of the worksheet.

After all values are put into appropriate tables, stock value will be calculated automatically in cell D16.
You can also enter the number of shares in cell D17, and template will automatically calculate the
company value (multiplying stock value by the number of shares).



If you wish to change something in this template, just order customization to your
needs at info@cfotemplates.com.

To order customization:
Think about changes that need to be made to your new template;
Send your requests and other comments to info@cfotemplates.com.
We will estimate the number of hours needed to customize your template and
we will send you a price quote.
Proceed to customization link at www.cfotemplates.com/Customization.htm.