Consider the information contained in the following table on Telstra Limited (TLS) shares. ASX Code TLS Share
Question:
Consider the information contained in the following table on Telstra Limited (TLS) shares.
ASX Code |
| TLS |
Share Price |
| $4.05 (Closing Price Monday 24 January 2022) |
|
|
|
Reported EPS for year ending June 2021 |
| 0.15 (15 cents per share) |
Median Consensus EPS Forecast |
| 0.18 (18 cents per share) |
|
|
|
Reported dividend for year ending June 2021 (D0) |
| 0.10 (10 cents per share) |
Growth Rate in Dividends (g) |
| 3.00% |
Median Consensus Dividend Forecast (D1) |
| 0.103 (10.3 cents per share) |
|
|
|
TLS Beta (β) |
| 0.80 |
|
|
|
Australian Risk Free Rate (RFR) |
| 2.67% |
Australian Market Return (E(RM)) |
| 5.73% |
Calculate the valuation for TLS shares using the constant growth dividend model using the details reported in this table. Are TLS shares undervalued or overvalued?
Essentials Of Corporate Finance
ISBN: 9780073405131
6th Edition
Authors: Stephen A. Ross, Randolph Westerfield, Bradford D. Jordan