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Would you advise to buy the stock

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Reference no: EM132983610

Question - Talga Ltd. just paid a $2 dividend to its shareholders and its share has a current market price of $35.55. Talga Ltd. is forecasting to grow its dividend respectively by 10% and 5% in the next two years. Thereafter, the company is expected to grow at a constant rate of 2%.

Your client has a required rate of return of 10%. Considering your valuation and the current market price, would you advise to buy the stock? Explain why.

Reference no: EM132983610

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