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What is the most appropriate or direct discount rate

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Question - Norah SA has just paid an annual dividend of €1.99. Analysts expect the company's profits to increase by 6% per year for the next four years. Beyond that, Norah SA's profits are expected to grow at the industry average rate of 4.6% per year.If Norah AG's cost of equity is 8.2% per year and its dividend payout ratio remains constant, what price should Norah AG's shares sell for using the dividend discount model?

If, while maintaining a constant total payout ratio, the CFO finally decided to pay out 50% of the profits in dividends and use the remaining 50% to buy back shares, what would be the price of Norah SA stock?

What is the most appropriate/direct discount rate to use to determine the price of this company's stock?

Reference no: EM133185333

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