Determine the intrinsic value of mahindra corporation

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Investment Company forecasts a $1.00 dividend for 2010, $1.7 dividend for 2011, $1.8 dividend for 2012, and a $1.8 dividend for 2013 for Mahindra Corporation. For year 2014 Investment Company forecasts that Mahindra will pay a $2.0 dividend.

The final consideration for the investment company was determining the cost of equity that would be used as the discounting factor. To sort out the cost of equity, the investment company estimated that the one-year beta for Mahindra Corporation would be 1.1 and the average equity risk premium for India was 5 per cent, and the risk-free rate. that yield on India's 10-year government treasury securities were 8.84 per cent on March 31, 2014.

Using the dividend discount valuation model determine the intrinsic value of Mahindra Corporation?

Reference no: EM132388629

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