Answer the Situation correctly show your Solution.(Also show the formulas that used) As a new trader , you bought a common stock , 35 shares of Globe Telecom Inc ( GTI), at Php 265 per share. You heard from some investors that being a utility company , GTI is estimated to be growing in value by 2% every year . Hence , you expect to receive dividends which also grow at 2% each year. What is the value of you GTI stocks? If Php 10.10 was paid as dividend today, find the amount of dividend you are expecting to receive in the next five years . Year Dividend (Php) 1 2 3 4 5
Dividend Valuation
Dividend refers to a reward or cash that a company gives to its shareholders out of the profits. Dividends can be issued in various forms such as cash payment, stocks, or in any other form as per the company norms. It is usually a part of the profit that the company shares with its shareholders.
Dividend Discount Model
Dividend payments are generally paid to investors or shareholders of a company when the company earns profit for the year, thus representing growth. The dividend discount model is an important method used to forecast the price of a company’s stock. It is based on the computation methodology that the present value of all its future dividends is equivalent to the value of the company.
Capital Gains Yield
It may be referred to as the earnings generated on an investment over a particular period of time. It is generally expressed as a percentage and includes some dividends or interest earned by holding a particular security. Cases, where it is higher normally, indicate the higher income and lower risk. It is mostly computed on an annual basis and is different from the total return on investment. In case it becomes too high, indicates that either the stock prices are going down or the company is paying higher dividends.
Stock Valuation
In simple words, stock valuation is a tool to calculate the current price, or value, of a company. It is used to not only calculate the value of the company but help an investor decide if they want to buy, sell or hold a company's stocks.
Answer the Situation correctly show your Solution.(Also show the formulas that used)
As a new trader , you bought a common stock , 35 shares of Globe Telecom Inc ( GTI), at Php 265 per share. You heard from some investors that being a utility company , GTI is estimated to be growing in value by 2% every year . Hence , you expect to receive dividends which also grow at 2% each year. What is the value of you GTI stocks? If Php 10.10 was paid as dividend today, find the amount of dividend you are expecting to receive in the next five years .
| Year | Dividend (Php) |
| 1 | |
| 2 | |
| 3 | |
| 4 | |
| 5 |
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