Kenchana Holding’s stock is expected to pay a dividend RM1.00 per share at the end of the year. The dividend is expected to grow 20 percent per year each of the following 3 years, after which time the dividend is expected to grow at the constant rate of 7 percent per year. The firm’s required return is 10%.
What is the firm’s horizon value?                                                        
What is the firm’s intrinsic value (P0) today?                                        
As a smart investor, would you buy the shares of Kenchana Holding if they are sold at RM55 each? Explain your answer.
Briefly discuss two (2) methods in stock valuation for Kechana Holding if the company that not paying dividend to their shareholders.

Answer rating: 100% (QA)

a Dividend Year 1 1 D2 D11g 112O 120 D3D11g2 11202 1202 144 D4D11g2 11203 1203 1... View the full answer