a) Analysts attempt to value ordinary shares, in order to determine if market values are correct....
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a) Analysts attempt to value ordinary shares, in order to determine if market values are correct. Identify and describe the more common methods of valuation. Include a detailed explanation of the dividend discount method of valuation. [10 marks] b) A similar type of approach can be employed when estimating value of a project or of an entire business. Describe this method, and identify the measures or inputs that are required when determining value. [10 marks] c) Othercell Motor Company just paid a dividend of €1.40. Analysts expect its dividend to grow at a rate of ten percent next year, eight percent for the following two years, and then a constant rate of five percent thereafter. Estimate the current value of Othercell shares. [10 marks] a) Analysts attempt to value ordinary shares, in order to determine if market values are correct. Identify and describe the more common methods of valuation. Include a detailed explanation of the dividend discount method of valuation. [10 marks] b) A similar type of approach can be employed when estimating value of a project or of an entire business. Describe this method, and identify the measures or inputs that are required when determining value. [10 marks] c) Othercell Motor Company just paid a dividend of €1.40. Analysts expect its dividend to grow at a rate of ten percent next year, eight percent for the following two years, and then a constant rate of five percent thereafter. Estimate the current value of Othercell shares. [10 marks]
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Related Book For
Business Statistics
ISBN: 978-0321925831
3rd edition
Authors: Norean Sharpe, Richard Veaux, Paul Velleman
Posted Date:
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