Assume a standard rate of income tax of 25 per cent. (Hint: multiply the DPS by a

Question:

Assume a standard rate of income tax of 25 per cent. (Hint: multiply the DPS by a factor of 100/75 to give the gross DPS).

Required:

(a) Calculate the value of a share in CDC Ltd using the following methods:

(i) Net asset methods (book value and market value)

(ii) Dividend valuation model

(iii) Price earnings ratio

(iv) Free cash flows

(b) Briefly evaluate each of the share valuation methods above.

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