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
FIXED ASSETS                          200 000                       LONG TERM LIABILITIES CURRENT ASSETS CASH             40 000                       LOAN

Factors Affecting cost of capital are elements in the business environment that cause a company cost of capital to be high and low. Figure below illustrative the various primary fa

a) Talk about in brief the various GAAPs that are mandatory to be followed. b) What are the several components of total cost.

Q. Explain about Death Benefit? Death Benefit - Amounts received under a life insurance contract and paid by reason of death of the insured. (Even though most death benefits ar

Discounted Pay Back Period (DPBP) : The discounted payback period is the number of periods taken in recovering the investment outlay on the present value basis.  Discounted pa

What are the pros and cons of commercial paper relative to bank loans for a company seeking short-term financing? Commercial paper is generally a cheaper source of short-term fin

Board should encourage a strong control culture. Manager's bonus must not only be linked to company profits but also linked to internal control procedures being adhered to. There m

a choice is to be made between the two completing proposal which require an equal investment of Rs.50000.00 and we are expected t gererate net cash flow as under. Year Project A

Investment banks and securities firms Investment banks support corporations or governments in the issue of new debt or equity securities. Investment banking comprises Th

Question: Susan started her current job at age 30, with the normal retirement age at 60. The remuneration package of her employment includes the following benefits on top of he