Intermediate Corporate Finance

FINC 3420 – Intermediate Corporate FinanceYou work in a large brokerage firm and your assignment is to analyze the stock ofNordstrom, Inc. (NYSE: JWN). Your…

FINC 3420 – Intermediate Corporate FinanceYou work in a large brokerage firm and your assignment is to analyze the stock ofNordstrom, Inc. (NYSE: JWN). Your boss recommends determining prices based onrelative valuation (multiples), the dividend discount model and discounted free cashflow valuation method. You determine that Nordstrom’s cost of equity is 7% and itsweighted average cost of capital is 5.5%. You estimate that Nordstrom’s dividendsand free cash flows currently grow at 2% and forecast that they will continue to growat 2% indefinitely.To gather any additional information, go to Yahoo! Finance (finance.yahoo.com).Enter the symbol for Nordstrom (JWN). From the main page for Nordstrom, click“Statistics.”Note the following terms used on the website:? ‘Trailing Annual Dividend Rate’ is trailing annual dividend amount ($),? ‘EPS (TTM)’ is trailing twelve months EPS,? ‘levered free cash flows (TTM)’ is trailing twelve months FCFE.
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