What would be your long-term recommendation for this stock

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Question - PTCL will only begin to pay a dividend 03 years from now. The expected annualized dividend at the end of year 03 will be Rs. 5 per share. This dividend is expected to grow at a rate of 8% over the next 5 years, then at 10% for next 3 years and will then become steady 12%, a rate at which it is assumed to grow forever. Answer the following questions using a discount rate of 14%.

1. Calculate the dividends over the first growth stage.

2. Using the Growth Models, calculate the value of all remaining dividends.

3. Calculate the present value (at time 0) of ALL future dividends.

4. Assuming PTCL was currently trading at Rs. 80 per share, what would be your long-term recommendation for this stock: buy, sell, or hold?

Reference no: EM132995245

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