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Implied Risk Premium Calculator: Intrinsic Value Estimate

The document provides an Implied Risk Premium Calculator with inputs for index level, dividend yield, growth rate, and bond rate, resulting in an intrinsic value estimate of $1,200.06 and an implied risk premium of 4.16%. It also includes expected dividends and present values over five years, culminating in an intrinsic value of $1,418.30. Additionally, it contains instructions for using a solver tool for calculations.

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José Manuel Esteban
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55 views2 pages

Implied Risk Premium Calculator: Intrinsic Value Estimate

The document provides an Implied Risk Premium Calculator with inputs for index level, dividend yield, growth rate, and bond rate, resulting in an intrinsic value estimate of $1,200.06 and an implied risk premium of 4.16%. It also includes expected dividends and present values over five years, culminating in an intrinsic value of $1,418.30. Additionally, it contains instructions for using a solver tool for calculations.

Uploaded by

José Manuel Esteban
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLS, PDF, TXT or read online on Scribd

Sheet1

Implied Risk Premium Calculator


Enter level of the index = 1418.3
Enter current dividend yield = 3.75%
Enter expected growth rate in earnin 6.00%
Enter current long term bond rate = 4.70%
Enter risk premium = 4.91%
Enter expected growth rate in the lo 4.70%

Intrinsic Value Estimate


1 2 3 4 5
Expected Dividends $ 56.38 $ 59.76 $ 63.35 $ 67.15 $ 71.18
Expected Terminal Value = $ 1,517.73
Present Value = $ 51.43 $ 49.74 $ 48.10 $ 46.52 $ 1,004.26
Intrinsic Value of I $ 1,200.06
Implied Risk Premium
Implied Risk Premium in current lev 4.16% (Go under Tools and choose Solver: See below)

1 2 3 4 5
Expected Dividends $56.38 $59.76 $63.35 $67.15 $71.18 $75.80
Expected Terminal Value = $ 1,792.42
Present Value = $ 51.79 $ 50.43 $ 49.11 $ 47.82 $ 1,219.15
Intrinsic Value of I $ 1,418.30

This is a picture of the solver option, with the inputs that I used (Do not try to enter numbers in it).
Enter current level of index where you see 759.64.

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