PT Elyksion Communication is experiencing rapid growth. The company expects earnings and dividend growth of 15% over the next two years, 13% in the third year, and constant growth of 6% for the following years. It is known that PT Elyksion Communication had a dividend of IDR 1.15 last year, and the required rate of return on its shares was 12%. You are required to:
a. Calculates the current stock value.
b. Calculates the expected price value of shares (expected stock price at the end of the year) at the end of Year 1 and Year 2.
c. Calculate dividend yield and capital gains yield for Year 1, 2 and 3.

Answer rating: 100% (QA)

To calculate the current stock value Po we can use the Gordon Growth Model a... View the full answer