Use a similar ROE model method described here:
Use the above mentioned calculator,
Cash Taken Out of Business ($): I entered 0 * This is dividends recieved for 1 year.
Current Book Value ($): 14.57 * We need to know this so we can determine the base value that’s changing.
Average Percent Change in Book Value Per Year (%): 6.67 * This will determine the estimate BV at the end of the next 10 years.
Years: 5 * This will most likely be 10 (if you’re comparing a 10 year federal note).
(Discount Rate) 10 Year Federal Note (%): 0.80 * Look up the ten year treasury note by clicking on this text.
Intrinsic Value ($): 19.33607699236469
I got this number as its intrinsic value:
19.33607699236469
The main difference is, I used 9% as discount rate when calculating NPV, while this calculator uses treasury 10-year note rate (0.80%).
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