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Solve in 60 mins thanks 12. The following questions are based on a stock and its derivatives. Relevant information is listed in the Table below.
Solve in 60 mins thanks
12. The following questions are based on a stock and its derivatives. Relevant information is listed in the Table below. [Total: 25] (a) An equity analyst applies the dividend discount model (DDM) to evaluate the stock price. Determine the stock price by DDM. [10] (b) Another equity analyst applies the FCFF model to evaluate the stock price. Show his price determination. [8] (c) If the market price is 50, what would be the investment suggestions of the two analysts? Provide suggestions that may help the analysts to select a more appropriate model between the DDM and the FCFF model. [7]Step by Step Solution
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