Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. stocks 2. a. write out the equation of corporate v

Stocks 2. a. Write out the equation of corporate value model, and why there is...

80.2K

Verified Solution

Question

Accounting

Stocks 2.

a. Write out the equation of corporate value model, and why there is a need of corporate value model for valuing stocks, when you can easily use the dividend model? [1 mark] b. Being a stock holder of Ghani Glass limited, a very well-known company listed in the Karachi Stock Exchange 100 index, you are keen to fairly determine the value of stock. Given the following information, what is Ghani Glass Limited value per share? The free cash flow of the company is expected to be negative -3 Million (Rs. 3,000,000) for first year, 6 Million (Rs. 6,000,000) for second year, 12 Million (Rs. 12,000,000) for third year, and 20 Million (Rs. 12,000,000) for the fourth year. The long-term growth after year 4 is expected to be 3%, and the rate of return is 8%. The company has Rs. 50 Million in the debt and at present there are 5 Million shares of the company.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

In a bolt manufacturing factory it is estimated that 6 of the bolts being manufactured...

Statistics
Q

You own and manage a pretzel and lemonade concession cart. You decide that you want to...

Finance
Q

Carol is running on the cross-country team, and she's really good at that too! It is...

Statistics
Q

Although research has identified milestones in language development, children exhibit lots of individual variation. Briefly describe the...

Medical Sciences
Q

Suppose that you have 175mL of a buffer that is .150M in both formic acid and...

Chemistry
Q

As people spend more and more time online, Click-to-Accept agreements have become increasingly common. Do people...

General Management
Q

Drag the tiles to the correct boxes to complete the pairs Match the animal species...

Biology
Q

Context: Barto Company provides this information for the month ended October 31, 2017: sales on...

Accounting
Q

I cant understand whats happening here, said Mike Holt, president of Severson Products Inc. We...

Accounting
Q

14. During the calendar year 2015, Deep Corporation had the following transactions on an unproved...

Accounting
Q

As per GASB 34, enterprise fund must be used when, a- All of these. b-Debt...

Accounting
Q

Milo Corporation completed the following selected transactions during the current year (Click the icon to...

Accounting