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Question 1 on Stock Valuation SASG, Inc. (a private company has always paid 15 percent of its earnings in the form of dividends. It just
Question 1 on Stock Valuation SASG, Inc. (a private company has always paid 15 percent of its earnings in the form of dividends. It just paid $7/share in dividends for this year. SASG's expected growth rate of earnings is 2.4 percent per year. The company has 10MM shares outstanding. (A). You want to have an estimate of SASG's current stock price. Lucy tells you that you can't because some important information is missing. Do you agree? If so, what is missing? If not, go directly to the next question. price agree to the youth that (B). Estimate SASG's current stock price and market value of equity. Write down the formula. If you agree with Lucy, then make a reasonable assumption about what is missing, based on which you should do your calculation. (C). What is the expected capital gain (in percent) of SASG's stock price from now until a year from now? Question 1 on Stock Valuation SASG, Inc. (a private company has always paid 15 percent of its earnings in the form of dividends. It just paid $7/share in dividends for this year. SASG's expected growth rate of earnings is 2.4 percent per year. The company has 10MM shares outstanding. (A). You want to have an estimate of SASG's current stock price. Lucy tells you that you can't because some important information is missing. Do you agree? If so, what is missing? If not, go directly to the next question. price agree to the youth that (B). Estimate SASG's current stock price and market value of equity. Write down the formula. If you agree with Lucy, then make a reasonable assumption about what is missing, based on which you should do your calculation. (C). What is the expected capital gain (in percent) of SASG's stock price from now until a year from now
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