Valuation of Indian banks using 3 Stage dividend discount Model as explained by A Damodaran
http://pages.stern.nyu.edu/~adamodar/pdfiles/valn2ed/ch13.pdf (Page 23)
Parameters and Assumptions
Discount Rate is calculated using CAPM formula
Discount Rate = Risk Free Rate + Beta * Equity Risk Premium
Risk Free Rate = 6.5%
Equity Risk Premium = 6%
Beta is calculated based on weekly returns for last 1 year.
Future growth rates, payout ratios and time periods are all estimates based on fundamental analysis of each company.