Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Assorted fund, a U.K.-based globally diversified equity mutual fund, is considering adding Talisman Energy Inc. (Toronto Stock Exchange: TLM) to its portfolio. Talisman is an independent upstream oil and gas company headquartered in Calgary, Canada. Brian Dobson, an analyst at the mutual fund, has been assigned the task of estimating a fair value of Talisman. Dobson is aware of several approaches that could be used for this purpose. Talisman pays semi-annual dividends. The total dividends during 2006, 2007, and 2008 have been C$0.114, C$0.15 and C$0.175, respectively. These imply a growth rate of 32 percent in 2007 and 17 percent in 2008. Dobson is doing the analysis in January 2008 and the stock price at that time is C$17. He has estimated that the required rate of return on Talisman stock is 8.72 percent.Dobson believes that the growth rate will be 14 percent throughout the first stage of eight years. The dividend growth rate will be 7 percent thereafter.
Instead of using the estimated stable growth rate of 7 percent in the second stage, Dobson wants to use his estimate that eight years later Talisman's stock will be worth 17 times its earnings per share (trailing P/E of 17). He expects that the earnings retention ratio at that time will be 0.70.
a. What is the terminal value of stock based on the two-stage DDM model?b. What proportion of the total value of the stock is represented by the value of the second stage?c. What is terminal value of the stock based on the earnings multiple approach?d. What is the current value of the stock based on the second approach?e. Dobson is wondering what the consequences to stock price would be if the duration of the first stage was assumed to be 11 years instead of 8 years. Comment.
Q. Explain about Long-term assets? Long-term assets are assets that a business has on hand or else uses for a relatively long time. Examples include plant, property and equipme
The balance sheet account as of July 31, 1995 for altona company are as follows: Capital: (fix lib) 35,630 Office Equipment (ass) 16730 Delivery Truck
Q. Define Operating expenses? Operating expenses for a merchandising company are those expenses other than cost of goods sold incurred in the usual business functions of a comp
Assume in Balance sheet Furniture is given @ rs.1200000. and an adjustment tells that half of the building is used for residential purpose... then what is treatment in accounts?
My company has done a down payment on inventory ,then manufacturer will ship this order between 30 to 60 days after original payment and the balance is due 60 days once the order g
If my company sells 4000 shares of common stock for $86,400, how do I record this in the Journal?
Why it is important for independent auditor to be a member of a professional body?
What is Internal control - Control of cash Internal control refers to procedures and methods a business uses to protect its assets. Checks are written for all transactio
i need help with predisco
Billable expenses are those expenses incurred by you on behalf of your client in performing duties / supply and service. These expenses are recoverable from your customer by way of
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!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd