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please help me to answer this question An analyst is trying to value a high growth company , Zara INC. He has collected the relevant
please help me to answer this question
An analyst is trying to value a high growth company , Zara INC. He has collected the relevant data found on the table below: Growth [for the first 5 years] Growth [indefinite] TSX index Jan 1, 2015 Risk free rate Beta TSX index Dec 31, 2015 Dividend payout Net income # of Shareholders Market Price 32% 5% 12542 2.5% 1.7 13950 55% $150,000 75000 $150 a) Calculate cost of capital [r] using CAPM b) Find D1,D2,D3 c) Find D4 d) Calculate v3 using D 4 e) Discount D1, D2,D3 and V3 f) Calculate share price. g) Is the share overvalued or undervaluedStep by Step Solution
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