Question
Go tohttps://au.finance.yahoo.com/quote/KO?p=KO(Links to an external site.) and click on 'Statistics' 1) How many Coca Cola Company (KO) shares are outstanding? (1 mark) 2) What is
Go tohttps://au.finance.yahoo.com/quote/KO?p=KO(Links to an external site.)
and click on 'Statistics'
1) How many Coca Cola Company (KO) shares are outstanding? (1 mark)
2) What is the current market capitalisation of the Coca Cola Company? (1 mark)
3) Show how the market capitalisation and the number of shares outstanding are related. (1 mark)
4) What is the historical (marked 'ttm') P/E ratio of the Coca Cola Company? (1 mark)
Show how this P/E ratio and the earnings per share of the Coca Cola Company are related. (1 mark)
5) Last year's dividend was $1.58 per share. Suppose that this dividend is expected to increase by 4% per year, and that investors currently require an 7.5% per annum expected return to invest in the shares of banks with a similar risk to the Coca Cola Company. Use the dividend valuation model to value Coca Cola Company (KO) shares. (3 marks)
6) Do the shares look undervalued or overvalued by the market, compared to your valuation? Explain your reasoning. Please write down the date on which you have completed your analysis, as the market value of the shares will change over time.(2 marks)
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