Unfortunately, your friend Ezio smith has just been fired. The company discovered that Ezio was a fraud. All his cheating and plagerism have now cough up to him .Ezio had constantly misled his professor about how well he understands managerial finance .In the real world , he could no longer hide the fact that he was a poor student who never put in the effort to learn the material. He never bought any textbooks and simply attempted to cheat on every exam.

you have decided to apply for Ezio's job. Being an honest and ethical student ,you understand the importance of conducting yourself in an appropriate manner.

The boss decides to give you a chance to prove yourself. He wants you to answer the following question.

What would the price of Tata Motors stock be if the company paid out dividends of one hundred and twenty -six thousand dollars, has an outstanding float of one hundred thousand common shares ,has a return on equity of twenty five percent and earnings per share of four dollars and fifty four cents.

The boss wants you to use the dividend growth model to calculate the price of Tata Motors stock as well as list the advantages and disadvantages of this model.

Answer rating: 100% (QA)

Using the dividend growth model the price of Tata Motors stock would be calculated as follows Price ... View the full answer