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
Explain the meaning of - Purchase consideration The  type  of  offer  made  to  target  company's  shareholders  would have  a  big  impact on acceptance. Apparently the price

I need your assistance on how to group the relevant data so as to help me in the data analysis

Role of Custodians The Securities and Exchange Board of India on 5th May, 1996, through its notification No.S.O.344 (E) has issued the SEBI (Custodian of Securities) Regulation

Securitization -Source of financing whereby an entity's ASSETS (characteristically mortgage loans, lease obligations or other kinds of RECEIVABLES) are placed in a special purpose

Suggestion regarding credit limit. should it be approved or not, what should be the amount of credit limit that electronics give to booth plastics


Question 1 Cost of capital is the minimum rate of return required by a firm on its investment in order to provide the rate of return by its suppliers of capital. Explain the co

This is the part of after-tax personal income that is not spent.

Q. Explain Inventory approach to cash management? This method analysis cash in the same way as engine inventory such that EOQ models may be employed. In such conditions cash

Assume Main Street Store’s Net Sales in 2010 were $1,000,000 and it’s Net Income in 2010 was $17,000. Thus, between 2010 and 2011 Main Street Store’s net sales increased 20%. Durin