Stock assignment 3 draft 3

You should answer the following questions. Please make sure that you should show your work to earn credit.

1. Using the past dividend payout information between 2016 and 2020, compute the growth rate (g) for this company. Your company must have a complete history of dividend payout during these periods. You can find such information atwww.dividendinformation.com. If your company lacks the dividend payout information, you need to select a new company (40 points).

2. First, lets assume that the required return (R) is 10% for this company. Using R, dividend information, and growth rate (g) from question 1, compute the stock prices of this company. Second, lets assume that the required return (R) is 20% for this company. Using R, dividend information, and growth rate (g) from question 1, compute the stock prices of this company(40 points).

3. Compare your estimated stock prices with actual stock prices as of January 4, 2021. Then tell me whether the stock is undervalued or fairly-valued or overvalued based on your estimation. Whats your decision if you hold this stock? Whats your decision if you dont hold this stocks? (20 points)

The name of company I chose is Bank of Nova Scotia .

Bank of Nova Scotia is one of North America's premier financial institutions and Canada's most international bank. They offer a diverse range of products and services including personal, commercial, corporate and investment banking. Scotiabank has built long-term value and recorded consistent earnings growth by building on its core strengths and by executing exceptionally well in its core businesses. These include Domestic Banking, Wealth Management, International Banking and Scotia Capital.

Last update 09/20/2021

Top Dividend Paying Stock

BNS

Bank Of Nova Scotia

5.77%

Dividend Yield Summary	2016	2017	2018	2019	2020		2021
Dividends	2.22	3.33	3.34	3.51	3.60		2.70
Average Price	53.10	60.90	58.95	54.68	44.94		61.80
Yield	4.18%	5.47%	5.67%	6.42%	8.01%		4.37%

The above Dividend, Average Price, and Yield values for 2021 are year-to-date.

Dividend Dates Ex Dividend Date	2021-07-02
Dividend Pay Date	2021-10-27

Bank of Nova Scotia Historical Data

Date	Open	High	Low	Close	Adj.close	volumn
Jan 04, 2021	68.24	68.36	67.43	67.72	66.20	7,114,400