Question
Predict the price of the common stock using models provided. a. Discuss differences of actual vs. calculated stock price. Please use this formula provided below
Predict the price of the common stock using models provided.
a. Discuss differences of actual vs. calculated stock price.
Please use this formula provided below :
the actual stock price rm26.14
D P= T-9 where: P=Current stock price g=Constant growth rate expected for dividends, in perpetuity r = Constant cost of equity capital for the company (or rate of return) Di = Value of next year's dividends Source: Yahoo Finance / data (Compare with EPS as well) Dividends Paid (USD) Dividend Growth 0.1200 0.1000 0.0800 0.0600 Date Jan-13 Jun-13 Jan-14 Jun-14 Jan-15 Jun-15 Jan-16 Jun-16 Jan-17 Jun-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jun-20 Dividends Paid (USD) 0.1012 0.0788 0.1056 0.0869 0.0849 0.0816 0.1101 0.0587 0.0745 0.0272 0.0423 0.0337 0.0473 0.0332 0.0380 0.0927 0.0400 62.33485646 34.0298318 -17.73029494 -2.278326541 -3.857073855 34.94099915 -46.72823363 27.01781301 -63.49057237 55.58169454 -20.43661107 40.43235539 -29.70481265 14.30634099 144.0473684 0.0200 0.0000 Jan-13 Jun-13 Jan-14 Jun-14 Jan-15 Jun-15 Jan-16 Jun-16 Jan-17 Jun-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jun-20 Dividends Paid (USD) 0.1012 0.0788 0.1056 0.0869 0.0849 0.0816 0.1101 0.0587 0.0745 0.0272 0.0423 0.0337 0.0473 0.0332 0.0380 0.0927 D P= T-9 where: P=Current stock price g=Constant growth rate expected for dividends, in perpetuity r = Constant cost of equity capital for the company (or rate of return) Di = Value of next year's dividends Source: Yahoo Finance / data (Compare with EPS as well) Dividends Paid (USD) Dividend Growth 0.1200 0.1000 0.0800 0.0600 Date Jan-13 Jun-13 Jan-14 Jun-14 Jan-15 Jun-15 Jan-16 Jun-16 Jan-17 Jun-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jun-20 Dividends Paid (USD) 0.1012 0.0788 0.1056 0.0869 0.0849 0.0816 0.1101 0.0587 0.0745 0.0272 0.0423 0.0337 0.0473 0.0332 0.0380 0.0927 0.0400 62.33485646 34.0298318 -17.73029494 -2.278326541 -3.857073855 34.94099915 -46.72823363 27.01781301 -63.49057237 55.58169454 -20.43661107 40.43235539 -29.70481265 14.30634099 144.0473684 0.0200 0.0000 Jan-13 Jun-13 Jan-14 Jun-14 Jan-15 Jun-15 Jan-16 Jun-16 Jan-17 Jun-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jun-20 Dividends Paid (USD) 0.1012 0.0788 0.1056 0.0869 0.0849 0.0816 0.1101 0.0587 0.0745 0.0272 0.0423 0.0337 0.0473 0.0332 0.0380 0.0927Step by Step Solution
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Focus On Personal Finance
Authors: Jack Kapoor, Les Dlabay, Robert J. Hughes, Melissa Hart
7th Edition
1265521972, 978-1265521974
