Other
INV2601 Asssignment 1 2022 Second Semester
- Course
- Institution
Contains solutions for INV2601 assignment 1 for the second semester of 2022. Calculations have been included to aid revision.
[Show more]
Seller
Follow
Investmenttutors1
Reviews received
Content preview
INV2601 ASSIGNMENT 1 2022SEMESTER 2
,For assistance and enquiries: Call/Whatsapp 066 077 8000
Calculations
Kagiso’s estimate: Using the variable model
D0 = 2
D1 = 2(1+0.30) = 2.6
D2 = 2.60(1+0.30) = 3.38
D3 = 3.38(1+ 0.20) = 4.056
D4 = 4.056(1+0.04) = 4.21824
D4 4.21824
Terminal value after year 3 (T3) = (Ke−g) = (0.10−0.04) = 70.304
, Intrinsic value:
CF0 = 0
CF1 = 2.6
CF2 = 3.38
CF3 = 4.056 + 70.304
Cfi = 10%
Comp NPV = 61.02 correct to 2dp
Mbali’s estimate: Using the constant model
Expected dividends
Intrinsic value = Required return−growth rate
Expected dividends = 2(1+0.04) = 2.08
Required return = 10%
Growth rate = 4%
2.08
Therefore, Intrinsic value = (0.10−0.04) = 34.67 correct to 2dp
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Investmenttutors1. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $2.84. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
72042 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now