MM Company's current stock price is Tk. 237 and its last dividend was Tk. 11.5 per...

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MM Company's current stock price is Tk. 237 and its last dividend was Tk. 11.5 per share. The company's required rate of return is 12.5 %. Dividend payout ratio of this company is 21% and the return on equity or reinvestment rate is 9.34%. i) Determine the true value/intrinsic value of this stock and take your investment decision. ii) What will be the price of stock of this company after five years? MM Company's current stock price is Tk. 237 and its last dividend was Tk. 11.5 per share. The company's required rate of return is 12.5 %. Dividend payout ratio of this company is 21% and the return on equity or reinvestment rate is 9.34%. i) Determine the true value/intrinsic value of this stock and take your investment decision. ii) What will be the price of stock of this company after five years?

Answer rating: 100% (QA)

i Determining the True ValueIntrinsic Value of the Stock The true value or intrinsic value of a stock is the present value of all the expected cash flows generated by the stock over its lifetime There... View the full answer