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Please write the detailed information about the Whole foods dividend discount model

Please write the detailed information about the Whole foods dividend discount model
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Answer #1

The growth rate of the dividend which is provided by whole food company is around 10% and when we will be trying to calculate the required rate of return,it will be 13%. These rates have been taken of after ascertainment of the balance sheet of the company and they will have to be discounted using dividend discounting model in order to arrive at the proper valuation of the company according to dividend discounting model.The dividend which has been paid last year is .$72

Share price of the company= dividend paid at the end of the year/)/(required rate of return- growth rate)

= ($.72(1+.1)/(13-10)

=$26

Share price of the company is currently valued at around $45 and it is highly overvalued.

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