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NAS Berhad has been growing at a fast rate of 30% per year recently and this growth rate is expected to last for another two
NAS Berhad has been growing at a fast rate of 30% per year recently and this growth rate is expected to last for another two years. Thereafter, the growth rate is expected to decline to a sustainable rate of 5%. NAS recently paid dividend of RM1.30 and the required rate of return is12%. How much is the stock worth today? Based on the calculation in (a), would you buy the share if the stock is selling at RM29 today? Is the share overvalued or undervalued? Briefly discuss the limitations of Constant Growth Model in the valuation of stocks
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