cfa shareRepurchase

Sheet1 (2)

Assumptions
Reconcile Models:
Total growth (gT)
7.0%
1. DDM (Gordon Growth)
Buyback yield (b)
2.0%
Dividend
$0.60 
Dividend growth (g)
5.0%
Discount
10%
Growth
7.0%
Div yield (d)
4.0%
Price
$20.00 
Discount rate (r)
10%
2. TCFM
First dividend (D1)
$0.60 
Dividend
$1.00 
Discount
10%
Growth
5.0%
fraction (f)
1.89%
Price
$20.00 
(1+g)/(1+gT)
 0.98 
Period:
0
1
2
3
4
5
6
7
8
9
10
11
Dividend Discount Model (DDM)
Dividends ($)
$0.600 
$0.642 
$0.687 
$0.735 
$0.786 
$0.842 
$0.900 
$0.963 
$1.031 
$1.103 
$1.180 
growth
7.0%
7.0%
7.0%
7.0%
7.0%
7.0%
7.0%
7.0%
7.0%
Stock Price
$20.00 
$21.40 
$22.90 
$24.50 
$26.22 
$28.05 
$30.01 
$32.12 
$34.36 
$36.77 
$39.34 
growth
7.0%
7.0%
7.0%
7.0%
7.0%
7.0%
7.0%
7.0%
7.0%
7.0%
Total Cash Flow Model (TCFM)
Repurchase fraction
1.89%
1.85%
1.82%
1.78%
1.75%
1.72%
1.68%
1.65%
1.62%
1.59%
Dividends ($)
$0.60 
0.6299
0.6613
0.6942
0.7288
0.7651
0.8032
0.8432
0.8852
0.9293
growth
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
Repurchase ($)
$0.40 
$0.42 
$0.45 
$0.47 
$0.49 
$0.51 
$0.54 
$0.57 
$0.60 
$0.63 
Total Cash flow (repurchase + dividend)
$1.00 
$1.05 
$1.11 
$1.161 
$1.219 
$1.280 
$1.344 
$1.411 
$1.481 
$1.555 
growth
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%

Sheet1

div yield (y)
3.0%
repurchase yield (b)
2.0%
growth (g)
5.0%
discount rate (r)
10.0%
fraction (f)
1.9%
7.0%
$0.60 
$20.00 
$0.37 
 0.9813 
Holding
Period
Fraction
0
1
2
3
4
5
1
0.0187
0.60
2
0.0183
0.60
0.642
3
0.0180
0.60
0.642
0.687
4
0.0177
0.60
0.642
0.687
0.735
5
0.0173
0.60
0.642
0.687
0.735
0.786
6
0.0170
0.60
0.642
0.687
0.735
0.786
0.842
7
0.0167
0.60
0.642
0.687
0.735
0.786
0.842
8
0.0164
0.60
0.642
0.687
0.735
0.786
0.842
9
0.0161
0.60
0.642
0.687
0.735
0.786
0.842
10
0.0158
0.60
0.642
0.687
0.735
0.786
0.842
$20.00 
$21.40 
$22.90 
$24.50 
$26.22 
$28.05 
Dividend
$0.60 
0.630
0.6615
0.694575
Repurchase
$0.40 
0.420
$0.44 
$0.46 
$1.00 
1.050
1.1025
1.1576
1
2
3
4
5
6
7
8
9
10
11
Dividends
$0.600 
$0.642 
$0.687 
$0.735 
$0.786 
$0.842 
$0.900 
$0.963 
$1.031 
$1.103 
$1.180 
7.0%
7.0%
7.0%
7.0%
7.0%
7.0%
7.0%
7.0%
7.0%
Price (Gordon Growth)
$20.00 
$21.40 
$22.90 
$24.50 
$26.22 
$28.05 
$30.01 
$32.12 
$34.36 
$36.77 
$39.34 
7.0%
7.0%
7.0%
7.0%
7.0%
7.0%
7.0%
7.0%
7.0%
7.0%
0.0187
 0.0183 
 0.0180 
 0.0177 
 0.0173 
 0.0170 
 0.0167 
 0.0164 
 0.0161 
 0.0158 
Dividend
$0.60 
0.6300
0.6615
0.6946
0.7293
0.7658
0.8041
0.8443
0.8865
0.9308
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
Repurchase
$0.40 
$0.42 
$0.44 
$0.46 
$0.49 
$0.51 
$0.54 
$0.56 
$0.59 
$0.62 
$1.00 
$1.05 
$1.10 
$1.158 
$1.216 
$1.276 
$1.340 
$1.407 
$1.477 
$1.551 
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
$20.00 
Gordon
$0.600 
7.0%
$20.00 
$1.00 
5.0%
$20.00 

Sheet2

Sheet3