Reference no: EM133179224

Question - Each point should be answered with proper explanation, none of the point should be missed.

For stock valuation, do research on the Engro Corporation's dividend policy and perform the following:

(i) Make a note on the dividend policy that whether the company is

(1) paying the dividend

(2) in case of dividend payment, whether dividend is constant or non-constant in the last 5 years (clearly mention them in your analysis)

(3) Assume that the company is paying dividend, estimate 'g' and use it for stock valuation through constant-growth model

(4) Assume that the company is paying inconsistent dividend, perform its stock valuation through non-constant growth model

(5) Assume that the company is not paying dividend, do its stock valuation using CAPM model.

(ii) Using the actual information on the last dividend paid (Rs/PKR) by the company, do these calculations and explain:

(1) What will be the dividend and share price in 1, 5, and 10 years. Assume both constant and non-constant growth model (Assume growth is non-constant for the initial three years).