Calculate company payout policy for firm

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Reference no: EM133062737

You are an investment analyst, currently considering some investments. You have analysed the company's financial statements and observed the following. 

 

Company X

Company Z

Recently reported earning

$200 million

$150 million

Recently reported dividend

$ 60 million

$ 40

Number of shares outstanding

50 million

30 million

firms earning growth

5%

7%

a) Calculate company payout policy for each firm. 

b) Calculate earnings per share and dividend per share for the respective firms 

c) If the growth is to be sustained into foreseeable future, what is the value of the shares.

 d) What main assumptions used to value a stock using constant growth dividend discount model?

Reference no: EM133062737

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