Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hi, pro Hugo. This time just like last time ,but need visit the websit first that can answer the questions https://au.finance.yahoo.com/quote/CBA.AX(Links to an external site.)Links

image text in transcribed

Hi, pro Hugo. This time just like last time ,but need visit the websit first that can answer the questions

https://au.finance.yahoo.com/quote/CBA.AX(Links to an external site.)Links to an external site.

PS:this is the final time of my gruop assignment thx u!!!!

image text in transcribed International Financial Institutions and Markets Go to https://au.finance.yahoo.com/quote/CBA.AX (Links to an external site.)Links to an external site. 1. What is the current market capitalisation of the Commonwealth Bank? 2. Explain and illustrate how the market capitalisation and the price per share are related. 3. What is the historical (marked 'TTM') P/E ratio of the Commonwealth Bank? 4. Show how this P/E ratio and the earnings per share ('TTM') of the Commonwealth Bank are related. 5. Assume that next year's expected dividend is $4.63 per share. Suppose that this dividend is expected to increase by 3% per year, and that investors require an expected return of 8% per year to invest in the shares of banks with a similar risk to the Commonwealth Bank. Use Gordon's Dividend Growth Model to value these shares. 6. Do the shares look undervalued or overvalued, based on your valuation? 7. What are the two principal determinants of priceearnings ratios, according to Gordon's model? Explain why each is important

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Management For Public Health And Not For Profit Organizations

Authors: Steven A. Finkler

2nd Edition

0131471988, 978-0131471986

More Books

Students also viewed these Finance questions

Question

When do you think a hiring decision will be made?

Answered: 1 week ago