What is the current (actual) very recent price of the firm Costco Wholesale Corp

Question

What is the current (actual) very recent price of the firm Costco Wholesale Corporation, and what is your estimate of what you think the stock price should be and what is your beta estimate and how you got it, along with your dividend growth estimates for the firm and why you think it/they are appropriate, as well as your cost of equity estimate and why you think it is appropriate, and your calculation of the firm’s stock price using the estimates above and an appropriate version of the dividend discount model. Online value listed for "enterprise value" 64,246 million; and share price $146.44. If I find the data online, can you tell me the formulas to find the Firm value, the current stock price, the beta estimate and the cost of equity estimate? I will then just plug numbers in when I find them. Thanks!

Explanation / Answer

The formulas are as follows:

1. Current Stock Price as per DCF: P0 = D1/(Ke -g) where P0 is ithe intrinsic stock price, D1 is the dividend next year, Ke = Cost of equity and g = growth rate

2. The beta estimate has to be looked online in various web portal and according to the one in Yahoo Finance, I have found it to be equal to 0.84 for Costco Wholesale Corporation

3. The cost of equity is calculated by capital asset pricing model (CAPM) as in Cost of equity (Re) = Rf + beta*(Rm -Rf) where Rf is the risk free rate (T-bill rate), Beta is the risk measure obtained in step 2, Rm is thye return of the market (return of Dow jones)

4. The firm value is the enteprise value ehat you have enlisted

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