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Essay heading: 10 YR Treasury risk-free rate of interest, krf.
 
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Issue: Business
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Date added: November 29, 2008
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No of pages / words: 2 / 285
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What will the new price be? Explain what happened. Recalculate IBM's stock using the P/E ratio model and the needed info found in the IBM pdf file. Explain why the present stock price is different from the price arrived at using CGM (Constant Growth Model).
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Find an estimate of the risk-free rate of interest, krf. To obtain this value, go to Bloomberg.com: Market Data [http://www.bloomberg.com/markets/index.html] and use the "U.S. 10-year Treasury" bond rate as the risk-free rate. In addition, you also need a value for the market risk premium. Use an assumed market risk premium of 7...
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