The P/E ratio, beta, and market risk premium contribute to estimating Toyota's cost of equity, pivotal in determining the intrinsic stock value via the Free Cash Flow model, though not directly linked to Toyota's free cash flow.
The mentioned elements—P/E ratio, beta, and market risk premium—associate with estimating the cost of equity, crucial in determining a company's intrinsic stock value through the Free Cash Flow (FCF) model. The P/E ratio forecasts future earnings expectations.
Influencing the terminal value estimation. Unlevered beta gauges a firm's risk relative to the market, contributing to the cost of equity calculation. Market risk premium denotes investors' added return demand for market risk.
While these elements don't directly involve Toyota's free cash flow, they significantly impact the cost of equity calculation in the FCF model. Ultimately, this calculation, combined with projected cash flows and terminal value estimation.
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Is it related to Toyota's stock price, free cash flow, P/E ratio, beta, market risk premium, or something else entirely?