# Graham-Dodd value of Gilead Sciences, Inc. (GILD)

 Previous Close \$66.38 Intrinsic Value \$NaN Upside potential NaN%

Previous Close

\$66.38

Intrinsic value =

[   (Book value - Goodwill ) x

+ (Net income - Dividends ) / %

+ (Dividends ) / %

] / Number of shares

Following the spirit of Benjamin Graham and David Dodd's teachings, we assume that intrinsic value (V*) of a stock is composed of the following three components (on a per share basis):

• Tangible book value (TBV), which serves as a proxy for assets' replacement costs or assets' fair value.
• Value attributed to retained earnings, which are defined as the difference between Net Income (NI) and Dividends (Div). The value of this component is calculated as the value of a perpetual bond with the coupon equal to the company's average yearly retained earnings, and the required rate of return for retained earnings (RRRre) of 20%.
• Value attributed to dividends. The value of this component is calculated as the value of a perpetual bond with the coupon equal to the company's average yearly dividend (Div) and the required rate of return for dividends (RRRd) of 10%.

V* = TBV + ((NI – Div) / RRRre) + (Div / RRRd)