Intrinsic value of Damai Bhd common stock

Assignment Help Business Economics
Reference no: EM133227510

Damai Bhd's expected earnings after taxes is RM300 million. The current market price of its common stock is RM5.00 per share. At present the company has 500 million shares outstanding and a PE ratio of 10.

1. Calculate the intrinsic value of Damai Bhd's common stock.

2. Would you buy the share at its current price? Why?

Reference no: EM133227510

Questions Cloud

Expected return on share equity portfolio with beta : What is the expected return on a share equity portfolio with a beta equal to 1.3?
WACC valuation method : Which of the following is not a step in the WACC valuation method? Determine the unlevered free cash flow of the investment.
Calculate monthly mortage payment : What is the formula to calculate a monthly mortage payment, with an interest rate, term and amount?
What is formula to calculate monthly mortage payment : What is the formula to calculate a monthly mortage payment, with an interest rate, term and amount?
Intrinsic value of Damai Bhd common stock : Calculate the intrinsic value of Damai Bhd's common stock. Would you buy the share at its current price? Why?
Calculate expected return of the portfolio : Calculate the portfolio weights that remove all risk. Calculate the expected return of the portfolio.
Internal rate of return investment rule : Define the Net Present Value (NPV) investment rule and the Internal Rate of Return (IRR) investment rule.
Miller economy with perfect capital markets and no frictions : Assume a Modigliani and Miller economy with perfect capital markets and no frictions. Do you agree with the new financial manager?
Assume that immediately after natalie sells calendar spread : Assume that immediately after Natalie sells the calendar spread, the implied volatility of both the two month and the one month options go up by 1%.

Reviews

Write a Review

Business Economics Questions & Answers

  Why are these economists-market participants so optimistic

The Wall Street Journal recession probability tracker shows the likelihood that the US will enter a recession in the coming 12 month between 0 to 75 percent, the widest range since the Great Recession, despite the average likelihood trending downward..

  Ticket prices accurately reflect the value to consumers

Over the last several years, the airline industry has lost billions of dollars and individual firms (with the exception of a few discount carriers) have been unable to make a profit. Assess aspects of the oligopoly market structure that may be releva..

  Illustrate what actions would you take if the hypothesis

what actions would you take to test the hypothesis. Following your test illustrate what actions would you take if the hypothesis must be rejected given the outcome of the test.

  What is the effect of deficit spending on interest rates

Ceteris paribus, what is the effect of deficit spending on interest rates? Antitrust legislation in the United States in recent decades has:

  What is the new unemployment rate

The labor force is 100 million and the unemployment rate is 5 percent. If one million people quit looking for a job, what is this called and what is the new unemployment rate?

  Decides to renovate its premises

ABC Software, a small producer, decides to renovate its premises. Instead of hiring an outside contractor and tradespeople, the firm decides to use its employees---secretaries, programmers, sales staff, and others--to do most of the work.

  Affect short-run aggregate supply-affect aggregate demand

Suppose in the first quarter of the year, Real GDP was $400 billion; in the second quarter it was $398 billion; in the third quarter it was $399 billion; and in the fourth quarter it was $395 billion. Has there been a recession? Briefly explain how e..

  Internal revenue code results in taxation

Create a scenario where the transfer of property to a controlled corporation under Section 351 of the Internal Revenue Code (IRC) results in taxation

  Determine the optimal number of units to put in package

A monopoly is considering selling several units of a homogeneous product as a single package. A typical consumer’s demand for the product is Qd = 50 - 0.25P, and the marginal cost of production is $120. Determine the optimal number of units to put in..

  Q1 if american cheese also cheddar cheese are substitute

q1. if american cheese also cheddar cheese are substitute afterward which of the following would increase the demand

  Conventional stance regarding the use of absolute value

This is a point I find very confusing and very hard to justify to students. Depending on the books, one finds many different conventions regarding the sign of elasticities and marginal rate of substitution (MRS). Some define them taking absolute valu..

  Describe the arson investigation process

For this assignment, describe the arson investigation process. You should tie it to the importance of suppression personnel (i.e. fire captain, fire engineer, a

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd