What is the value of ast stock, Financial Management

Brandon Michael Chu of Henry Law & Yang Yi Capital Limited believes that earnings and dividends at Alua Amanova & Shuwen Wang Technologies (AST) will continue to grow at 12% per year for 20 years. After that growth will level off to 5% for the indefinite future. The dividend just paid was $4 per share and the required rate of return on this stock is 12%.

a. What is the value of AST stock?

b. Suppose AST is currently trading at $120 per share. Expected D1 = $4.80. After that dividends will grow at 12% per year for ? number of years, then after dividends will grow at 5% per year forever. Required rate of return is 12%. How many years of growth at 12% is the market predicting?

 

Posted Date: 4/5/2013 5:39:30 AM | Location : United States







Related Discussions:- What is the value of ast stock, Assignment Help, Ask Question on What is the value of ast stock, Get Answer, Expert's Help, What is the value of ast stock Discussions

Write discussion on What is the value of ast stock
Your posts are moderated
Related Questions
Saven Travel Corporation is considering several investment opportunities in order to diversify its operations. Mr. Saven, president, is trying to determine the firm''''s cost of ca

Specific Cost of Capital When the Cost of every source of capital is individually calculated, it is known as Specific Cost of Capital example Cost of equity, cost of debt, etc

Aligning Financial Reports: The primary purposes of financial systems are to provide information to interested parties.  Any reports produced through the financial management p

What do financial managers look for when they analyze pro forma financial statements? After the pro forma financial statements are finished, financial managers examine the

Strategies of Hedge Funds: Hedge funds use a range of different strategies, and each fund manager can argue that he or she is unique and could not be compared to other manager

How can a price ceiling make consumers better off?  Under what conditions might it make them worse off? If the supply curve is completely inelastic a price ceiling will raise c

The personnel department of a firm is entrusted with the responsibility of recruitment, training and placement of the staff for the firm. The department is also required to critica

Due to the complexity of the tasks involved in many projects, communication of responsibility for those tasks is often helped by means of graphical planning techniques.

Why do total assets equal the sum of total liabilities and equity?  Explain. Assets = Liabilities + Equity Assets are the items of value that a business owns. Liabilities ar

Define depreciation expense as it appears on the income statement. How does depreciation affect cash flow? The term accounting depreciation is the allocation of an asset's init