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FIN630 Assignment 01 Fall 2020 Solution / Discussion Due Date: 09-12-2020

Assignment Question:

 

 

The shares of Angolo Pharma Pvt. Limited are currently trading at Rs. 65 per share in the market. The company estimates that its dividend in next year will be equal to Rs. 2.50, which is expected to grow by 5% annually for foreseen future and the required rate of return for investors is 8%. On the other hand the shares of Quicker Pharma Pvt. Limited are currently trading at Rs. 45 per share in the market. The company estimates that its dividend in next year will be equal to Rs. 1.50, which is expected to grow by 5% annually for foreseen future and the required rate of return for investors is 10%.

 

Requirements:

You are required to:

 

1.

Calculate the value of stock of Angolo Pharma Pvt. Limited on the basis of Stable Dividend

 

Discount Model-The Gordon Growth Model.

(3 marks)

2.

On the basis of above calculations, determine either the stock of Angolo Pharma Pvt.

 

Limited is overvalued or undervalued.

(2 marks)

3.

Calculate the value of stock of Quicker Pharma Pvt. Limited on the basis of Stable Dividend

 

Discount Model-The Gordon Growth Model.

(3 marks)

4.

On the basis of above calculations, determine either the stock of Quicker Pharma Pvt.

 

Limited is overvalued or undervalued.

(2 marks)

 

(Note: You are required to must show complete working/calculation in each of the required parts)

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fin 630 assignment Solution|Fall 2020|Urdu|Hindi

The solution given in youtube video is correct

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