Question: Firm A distrubuted dividends to its shareholders for the current year according to the payout ratio of 25%. Net profit was 80 million TL. Total
Firm A distrubuted dividends to its shareholders for the current year according to the payout ratio of 25%. Net profit was 80 million TL. Total shares are 10 million. The dividends are expected to grow at a constant rate of% 12 in the following years. Find the fundamental price per share according to Gordon Model if the Turkey 10 year benchmark government bond in TL yields at% 14 and the risk premium is% 6. If one share of firm A is selling at 32 TL in Borsa Istanbul, would you invest in this stock? Is it undervalued or overpriced?
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