Foot Locker / Hist.Data / Zero Real Growth
Share Buyback vs. Dividend using Terminal Values (Model SB‑DIV‑TV)
@SimSim
3 months ago
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Intro
Const
Dist 1
Dist 2
Sim
Sim Vary
This model simulates the gain/loss to long-term shareholders from making a
single share buyback , compared to making a dividend payout for the
same amount of money. All future earnings are assumed to be paid out as
dividends.
Share-prices are NOT simulated. Instead the simulated earnings for the final
year are assumed to grow forever so they are used to calculate
Terminal Values.
If you want to simulate future share-prices instead, then you should use
another model.
The capital gains tax is irrelevant because this model does not simulate
future share-prices. And the dividend tax is also ignored, because it cancels
out in the valuation formulas.
Docs
Related Models
2024-07-18T15:37:55.586200
image/svg+xml
Matplotlib v3.9.1, https://matplotlib.org/
8.6%
8.8%
9%
9.2%
9.4%
Discount Rate
-5%
-2.5%
0%
2.5%
5%
Terminal Growth
This plot shows the probability distributions for the discount rate
and terminal growth-rate.
2024-07-18T15:37:56.481284
image/svg+xml
Matplotlib v3.9.1, https://matplotlib.org/
0
500m
1b
Year 1
Earnings
Year 2
(Same as previous)
Earnings
This plot shows the probability distributions for the Earnings in
future years.
2024-07-18T15:37:49.586307
image/svg+xml
Matplotlib v3.9.1, https://matplotlib.org/
-12%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
Return on Intrinsic Value (ROIV)
SimSim.Run - Jul 18-2024 (UTC)
Foot Locker / Hist.Data / Zero Real Growth
Share Buyback vs. Dividend using Terminal Values (Model SB-DIV-TV)
Prob Loss: 10%
Normal Mean 1.57% / Std 2.1%
Kernel Density Estimate (KDE)
This histogram shows the Return on Intrinsic Value (ROIV), when
making a share buyback for USD 100m
at the current share-price of USD 26.
Out of 500k simulation trials 94% had valid results. Outliers >10.0 IQR are removed.
More
ROIV is invalid when the intrinsic value is zero or negative.
ROB also works in those cases.
The red box at the bottom shows the probability of loss, if a share buyback
is made now at the current share-price of USD 26.
2024-07-18T15:37:50.878190
image/svg+xml
Matplotlib v3.9.1, https://matplotlib.org/
-200%
-100%
0%
100%
200%
300%
400%
Return on Buyback (ROB)
SimSim.Run - Jul 18-2024 (UTC)
Foot Locker / Hist.Data / Zero Real Growth
Share Buyback vs. Dividend using Terminal Values (Model SB-DIV-TV)
Prob Loss: 17%
Normal Mean 102% / Std 110%
Kernel Density Estimate (KDE)
This histogram shows the Return on Buyback (ROB), when making a
share buyback for USD 100m at the
current share-price of USD 26.
Out of 500k simulation trials 100% had valid results. Outliers >10.0 IQR are removed.
More
The red box at the bottom shows the probability of loss, if a share buyback
is made now at the current share-price of USD 26.
2024-07-18T15:37:52.278816
image/svg+xml
Matplotlib v3.9.1, https://matplotlib.org/
15
20
25
30
35
Current Share-Price
-20%
-15%
-10%
-5%
0%
5%
Return on Intrinsic Value (ROIV)
SimSim.Run - Jul 18-2024 (UTC)
Foot Locker / Hist.Data / Zero Real Growth
Share Buyback vs. Dividend using Terminal Values (Model SB-DIV-TV)
Prob Loss: 10%
This 2D histogram shows how different share-prices at the time of
the share buyback, would impact the Return on Intrinsic Value (ROIV),
when making a share buyback for USD 100m.
Out of 500k simulation trials 95% had valid results. Outliers >10.0 IQR are removed.
More
ROIV is invalid when the intrinsic value is zero or negative.
ROB also works in those cases.
The x-axis shows a range of share-prices around the current share-price of
USD 26, which is marked as a dashed blue line.
The red box at the bottom shows the probability of loss, if a share buyback
is made now at the current share-price of USD 26.
2024-07-18T15:37:54.279866
image/svg+xml
Matplotlib v3.9.1, https://matplotlib.org/
15
20
25
30
35
Current Share-Price
-200%
0%
200%
400%
600%
800%
Return on Buyback (ROB)
SimSim.Run - Jul 18-2024 (UTC)
Foot Locker / Hist.Data / Zero Real Growth
Share Buyback vs. Dividend using Terminal Values (Model SB-DIV-TV)
Prob Loss: 17%
This 2D histogram shows how different share-prices at the time of
the share buyback, would impact the Return on Buyback (ROB), when
making a share buyback for USD 100m.
Out of 500k simulation trials 100% had valid results. Outliers >10.0 IQR are removed.
More
The x-axis shows a range of share-prices around the current share-price of
USD 26, which is marked as a dashed blue line.
The red box at the bottom shows the probability of loss, if a share buyback
is made now at the current share-price of USD 26.
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