DDM - Kate Excel 2 - Econ 2560 PDF

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DDM assignment part 1 ...

Description

TD Bank Historical Growth Year

2015

2016

2017

2018

2019

DATE

Quarterly Dividend

Jan. 02, 2015 Apr. 02, 2015 Jul. 07, 2015 Oct. 02, 2015 Jan. 06, 2016

$0.47 $0.51 $0.51 $0.51 $0.51

Apr. 06, 2016 Jul. 06, 2016 Oct. 05, 2016 Jan. 06, 2017 Apr. 06, 2017 Jul. 06, 2017 Oct. 05, 2017

$0.55 $0.55 $0.55 $0.55 $0.60 $0.60 $0.60

Jan. 09, 2018 Apr. 09, 2018 Jul. 09, 2018 Oct. 09, 2018 Jan. 09, 2019 Apr. 09, 2019 Jul. 09, 2019 Oct. 09, 2019

$0.60 $0.67 $0.67 $0.67 $0.67 $0.74 $0.74 $0.74

Annual Dividend

Annual Growth

Expected Dividend

Year-end Price Expected Rate of Return

No Data

No Data

$2.16

0.08

8%

Formula for annual growth: [(Div2 Div1)/Div1] = D9-D5/D5

$2.35

0.087962963

8.80%

Sample growth calculation: (0.5-0.54)/0.54 = 8.8%

$2.61

0.110638298

11.06%

$2.89

0.107279693

10.73%

Documentation 0.096475 Sum of Annual Growths/4

(0.08 + 0.088 + 0.1106 + 0.1073)/4 = 9.6%

$3.17 Annual Dividend2019 * (1+AVG Growth)

$2.89 * (1+0.096475) = $3.1688 Source: https://ca.finance.yahoo.com/quote/TD.TO/histor y?period1=1420070400&period2=1577836800& $72.10 Dec. 31, 2019 interval=1d&filter=history&frequency=1d 0.140425246 (Expected Dividend/Year-end Price) + Growth Rate ($3.17/72.1) + 0.096475 = 0.140 = 14%

Sustainable Growth Data: Net Income (In $ Thousands) Book Value of Equity (In $ Thousands)

Dividend per Share Earnings per Share

11,668,000 Oct. 30, 2019

https://ca.finance.yahoo.com/quote/TD.TO/financ ials?p=TD.TO

87,701,000.00 Oct. 30, 2019

https://ca.finance.yahoo.com/quote/TD.TO/balan ce-sheet?p=TD.TO

$2.89 Oct. 2019 $6.25 Oct. 30, 2019

https://ca.finance.yahoo.com/quote/TD.TO/histor y?period1=1420070400&period2=1577836800& interval=1d&filter=history&frequency=1d https://ca.finance.yahoo.com/quote/TD.TO/keystatistics?p=TD.TO

Calculations: Return on Equity Plowback Ratio Growth Rate Expected Dividend

Year-end Price Expected Rate of Return

Documentation Source for dividends: https://ca.finance.yahoo.com/quote/TD.TO/h istory?period1=1420070400&period2=1577 750400&interval=1wk&filter=history&freque 1 k

$2.00

Result Average Growth

Annual Growth %

0.133042953 53.76% 0.071523891 $3.10

Net income/equity 1-DIV/EPS ROE * Plowback Ratio Annual Dividend 2019 * (1+Growth Rate)

$72.10 Dec. 31, 2019 0.114474017 (Expected Div/Year-End Price) + Growth Rate

(11,668,000/87,701,000) = 13.3% 1-(2.89/6.25) = 0.5376 (0.133042953*0.5376) = 0.0715 = 7.15% 2.89 * (1 + 0.0715) = 3.096635 Source: https://ca.finance.yahoo.com/quote/TD.TO/histor y?period1=1420070400&period2=1577836800& interval=1d&filter=history&frequency=1d (3.10/72.10) + 0.071523891 = 11.45%...