What is the value of ast stock, Financial Management

Assignment Help:

Brandon Michael Chu of Henry Law & Yang Yi Capital Limited believes that earnings and dividends at Alua Amanova & Shuwen Wang Technologies (AST) will continue to grow at 12% per year for 20 years. After that growth will level off to 5% for the indefinite future. The dividend just paid was $4 per share and the required rate of return on this stock is 12%.

a. What is the value of AST stock?

b. Suppose AST is currently trading at $120 per share. Expected D1 = $4.80. After that dividends will grow at 12% per year for ? number of years, then after dividends will grow at 5% per year forever. Required rate of return is 12%. How many years of growth at 12% is the market predicting?

 


Related Discussions:- What is the value of ast stock

Explain the benefits and drawbacks of financial hedging, What are the benef...

What are the benefits and drawbacks of financial hedging of the firm’s operating exposure vis-a-vis operational hedges (like relocating manufacturing site)? Answer:  Financial he

Irr, #question how to collect real irr %..

#question how to collect real irr %..

Historical inflation and stock value experience, Historical Inflation and S...

Historical Inflation and Stock Value Experience The experimental evidence denies the status of stocks as a good hedge against inflation. A study conducted by Ibbotson and Brins

Management, . Why do some organizations seem to have a new CEO every year o...

. Why do some organizations seem to have a new CEO every year or two, whereas others have top leaders who stay with the company for many years (e.g., John Chambers at Cisco)? What

Default risk, Default risk is the risk that arises when the iss...

Default risk is the risk that arises when the issuer is not able to satisfy the terms and conditions of the obligation with respect to timely pa

Working capital management, WORKING CAPITAL MANAGEMENT Working capital ...

WORKING CAPITAL MANAGEMENT Working capital relates to the capital required for daily operations of a business enterprise.  The requirement for Working Capital is omnipresent fo

Gordon''s dividend equalisation model, If the EPS is Rs.5, dividend pay-out...

If the EPS is Rs.5, dividend pay-out ratio is 50%, cost of equity is 20% and growth rate in the ROI is 15%. What is the value of the stock as per Gordon's Dividend Equalisation Mod

What is the expected return of cinderella''s portfolio, Question: Cinde...

Question: Cinderella invests the following sums of money in common stocks having the expected returns as detailed below: (a) What is the expected return of Cinderella's por

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd