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Please help me.. Please help me .. Please please .. QUESTION 5 It is January 1st, 2019 and the stock of Citymoor Corporation is trading
Please help me.. Please help me .. Please please ..
QUESTION 5 It is January 1st, 2019 and the stock of Citymoor Corporation is trading at RM17.60 per share. You are recommended by your investment agent to buy the company's stock. The information below was extracted from Citymoor Corporation's financial statements as at December 31st, 2018 Total assets were RM4,500,000, total liabilities were RM180,000 while preferred stock equity was RM400,000. The total number of common stock outstanding was 260,000 units. Earnings available to the common shareholders are RM800,000 and it is expected to grow at 8 percent, 12 percent, 15 percent and 18 percent for the next four years. Dividend payout ratio is maintained at 40 percent annually. Cost of equity is 12 percent. . . a) Using residual income model, determine the intrinsic value per share as of January 1st, 2019. (8 marks) b) Should you buy the stock of Citymoor Corporation? Justify your decision. (2 marks)Step by Step Solution
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