QUESTION: Stock Valuation You expect Flight Centre Ltd. to maintain the same dividend payout ratio as at

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QUESTION: Stock Valuation

You expect Flight Centre Ltd. to maintain the same dividend payout ratio as at 30th June 2017 for the next three years. After three years, the company will increase the dividend payout ratio to 70%. Assume company's return on new investment is 16.6% and the required rate of return is 10%. Using the dividend discount model, calculate the intrinsic value for stock today.

Assume today is 30th June 2017 and you have just been paid a dividend and that the next dividend will be received in exactly one year (assume dividend is paid annually).

The stock price as at 30th June 2017 was $38.30.

Use data given below:

Posted Date: May 19, 2024 01:16 AM

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QUESTION: Stock Valuation You expect Flight Centre Ltd. to maintain the same dividend payout ratio as at

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