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Please show all working out for a) and b) Question 2 (COMPULSORY) (20 marks) After extensive research, you have also gathered data on key financial
Please show all working out for a) and b)
Question 2 (COMPULSORY) (20 marks) After extensive research, you have also gathered data on key financial metrics of the firm and corresponding share. Given the information below: Dividend Yield at To 1.92% EPS at T 407 cents Trailing Price / 10.19 Earnings Retention Rate 89.63% ROE 5.32% k 7.93% WACC 7.93% T1 T2 T3 T4 T5 and beyond 3% Growth FCFF perpetuity FCFF 2493 2224 2446 2691 2963 3264 a) What is the price of a share according to the DDM, assuming dividends are paid in perpetuity? (5 marks) b) What is the value of the firm according to the FCFF model? (15 marks)Step by Step Solution
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