How to take FCF yield and dividend yield into consideration when building a simple model for IRR?
Hi guys,
I have a quick question please... I'm building a very simple model to show projected IRR in different scenarios for a retail stock. My assumptions are - revenue growth, margin expansion. I have base, bear, bull scenarios. The stock's FCF yield is 3% and its dividend yield is 1%. I assume holding period of 3 years and need to show projected IRR for that.
So far, I've just used revenue growth and margin expansion to get an expected revenue and expected net income in 3 years, then I get the EPS in 3 years, and multiply it by where I expect the p/e multiple to be.
How can I put dividend yield and cash flow yield in it too please? THank you!
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