Question
On the last trading day of 2013, an analyst is reviewing his valuation of ABC ordinary shares. The analyst has the following information and assumptions:
On the last trading day of 2013, an analyst is reviewing his valuation of ABC ordinary shares. The analyst has the following information and assumptions: i. The current price is sh 50. ii. The analyst estimate of the companys intrinsic value is sh 55.00 iii. In addition to the full correction of the difference between the companys current price and its intrinsic value the analyst forecasts additional price appreciation of sh 3.20 and a iv. cash dividend of sh 0.60 over the next year. v. The required rate of return of the company is 9%. What is the analysts expected holding period return of the company?
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