Question: Please provide some hints or direction. There was no help provided for this hw. The Chinese c-commercc company Alibaha Group oated its shares in the

Please provide some hints or direction. There was no help provided

Please provide some hints or direction. There was no help provided for this hw.

for this hw. The Chinese c-commercc company Alibaha Group oated its shares

The Chinese c-commercc company Alibaha Group oated its shares in the biggest Initial Public Offering in US history. Alibaba Group priced its shares at $68 raising $21.8 ha and valuing the company at 5167.6 ha. The IPO prospectus notes that Alibaba does not plan to pay dividend in the foreseeable future and reported annual earnings of $3.52 per share. Analysts estimate that the firm will grow at 25% per year for the next 5 years and at 5% after that. Currently. Return on Equity is 2596. Investors agree that the appropriate discount rate is 10% and that in 5 years the rm will start distributing a dividend and will keep the payout ratio constant forever. After a few days of trading. Alibaba's share price closes at $88. This trading price is the consensus valuation among investors and analysts. 1. What is the payout ratio after year 5 implied in the investors' valuation? 2. What is the implied Return on Equity (after year 5)? Click to View answer [+] 3. What is the implied PVGO? Show all of your calculations and explain your approach

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