Question 2. (Stock Valuation) Solve the following questions (1) Find out values of following stocks. The...

Question 2. (Stock Valuation) Solve the following questions

(1) Find out values of following stocks. The discount rate is 8% Stock A: recently paid dividend = $ 3 per share, dividend growth rate as 0% Stock B: recently paid dividend = $ 6 per share, dividend growth rate as 4% Stock C: EPS = $ 15, benchmark PER = 3

(2) Firm A has recently paid dividend of $ 14 per share. It is expected that firm A will grow by 15% for next six years and 5% thereafter. It is also known that firm A’s beta is 1.5, risk free rate is 1%, and market risk premium is 6%. Estimate the stock value of firm A.

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jeff jeffy answered 1 year ago

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