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Toyota Capital Valuation: Justifying Current Market

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Justify the current market price of the organization's equity, if any, using various capital valuation models.

Show calculations that support your findings, including those involving rates of return

Organization is Toyota and here is the link.

http://www.toyota.co.jp/en/ir/library/annual/pdf/2009/index.html.

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https://brainmass.com/business/discounted-cash-flows-model/toyota-capital-valuation-justifying-current-market-286907

Solution Preview

Please see attached file for answers.

In computing for the value of Toyota and its common stocks, I used a variation of the Gordon Growth Model or GGM. In the valuation, the following assumptions were used:

1. The cash dividends after the fiscal year ended March 31, 2009 is expected to grow at a rate of 2.13% which is the compounded annual growth rate of dividends from 2004 to 2009. A larger sample, 2004 to 2009, was used in computing for the annual growth rate for dividends because of the decrease in cash dividends for the fiscal year ended March 31, 2009.
Dividends (in Yen) % Change ...

Solution Summary

The solution justifies the current market.

$2.19