Suppose in previous year ACB paid a dividend of VND20000. The dividend growth rate is expected...

 

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Suppose in previous year ACB paid a dividend of VND20000. The dividend growth rate is expected of 8%/year for next 4 years, then the dividend growth rate is only 5%/year and lasts forever. The required rate of return is 15%, please answer the next these questions: If the market price of this stock is 380,000 then should you buy this stock or not? What is the real value of this stock at the moment? What is the dividend this year (DO)? What is the value of this stock at the beginning of growing forever period? By year N, the stock is growing forever. N =? Suppose in previous year ACB paid a dividend of VND20000. The dividend growth rate is expected of 8%/year for next 4 years, then the dividend growth rate is only 5%/year and lasts forever. The required rate of return is 15%, please answer the next these questions: If the market price of this stock is 380,000 then should you buy this stock or not? What is the real value of this stock at the moment? What is the dividend this year (DO)? What is the value of this stock at the beginning of growing forever period? By year N, the stock is growing forever. N =?

Answer rating: 100% (QA)

To answer the questions we need to calculate the present value of the dividends and the perpetuity value at different time periods To determine whethe... View the full answer