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6 ABC is a listed company and widely regarded as a mature, rock-solid, dividend-paying stock. Following information has been provided on ABC's stock: Current dividend
6 ABC is a listed company and widely regarded as a mature, rock-solid, dividend-paying stock. Following information has been provided on ABC's stock: Current dividend (DO) = +2.00/share Current free cash flow(FCFO) = +1 million Expected growth rate of dividends and cash flows (g) = 6.0, Required rate of return (r) = 11.0, Shares outstanding = 600,000 Required: A) Value the stock of the company with dividend value model and Free cash flow model B) Discuss the similarities and differences between those two models (Total Marks 10)
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