Which discounted cash flow model to value company shares

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Assignment:

Answer the following questions:

1. Company A's market cap accounts for more than 50% of the total market cap of all listed companies in country B. What statistical problem arises when calculating a regression beta for A using country B market index?

2. A company has an 80% dividend payout ratio, and its earnings per share have been growing at a steady 2% per year for the last 40 years. Which discounted cash flow model would you suggest to value the company's shares?

3. You are valuing the shares of a start-up company that has never paid dividends and is growing at around 140% per year. Which discounted cash flow approach is most appropriate?

Reference no: EM133412367

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