Firm A distributed dividends to its shareholders for the current year according to the payout ratio of 35%. Net profit was 40 million TL. Total shares are 10 million . The dividends are expected to grow at a constant rate of %12 in the following years. Find the fundamental price per share according to Gordon Model if the Turkey 10 year benchmark
Firm A distributed dividends to its shareholders for the current year according to the payout ratio of 35%. Net profit was 40 million TL. Total shares are 10 million . The dividends are expected to grow at a constant rate of %12 in the following years. Find the fundamental price per share according to Gordon Model if the Turkey 10 year benchmark
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Firm A distributed dividends to its shareholders for the current year according to the payout ratio of 35%. Net profit was 40 million TL. Total shares are 10 million . The dividends are expected to grow at a constant rate of %12 in the following years. Find the fundamental price per share according to Gordon Model if the Turkey 10 year benchmark government bond in TL yields at %14 and the risk premium is %6. If one share of firm A is selling at 20 TL in Borsa Istanbul, would you invest in this stock ? Is it undervalued or overpriced ?
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