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ABIBags'stockpriceisP48.5and itrecentlypaid aP1.75 dividend.Thedividend isexpectedtogrowby15%forthenextthree (3) years, then grow forever at a constant growth rate. The risk-free rate and average rate of return on the
ABIBags'stockpriceisP48.5and itrecentlypaid aP1.75 dividend.Thedividend isexpectedtogrowby15%forthenextthree (3) years, then grow forever at a constant growth rate. The risk-free rate and average rate of return on the market are 4% and 8% respectively.ThebetacoefficientofABIBags'stockis1.5aggressive beta.TheWeightedaverage costofcapital(WACC)is8%.
- WhatistheamountofHorizonorTerminalValue ofABIBag?
- Atwhatconstantrateisthestockexpectedtogrowafterthe third (3rd)year?
- WhatistheABIBag'sstock priceinyear2(P2)?
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