In his latest article written for Alan Kohler's Eureka Report, Scott looks at how to determine a fair valuation for the price of Wesfarmer shares.

He applies the dividend discount model which suggests that if Wesfarmers can produce an ongoing 4.5% annual growth in dividends, the current valuation of approximately $31 is reasonable.  However there are a number of other key issues in play such as economic growth and inflation, the way managers deploy capital, management of debt and the strategy for and market power of Coles.

Click on the following link to read Scott's analysis - What price Wesfarmers?.