You bought 50 shares of Jollibee Food Corp. at Php 25 per share. The amount of dividend paid during the first period is Php 1.10 per share. Since JFC performs well in the PSE, you expected that their dividend payments will grow rate of 3%. Using the dividend valuation principle with the required rate of 5%, find the value one share of JFC. Under your assumptions, is JFC undervalued or overvalued in the market?
You bought 50 shares of Jollibee Food Corp. at Php 25 per share. The amount of dividend paid during the first period is Php 1.10 per share. Since JFC performs well in the PSE, you expected that their dividend payments will grow rate of 3%. Using the dividend valuation principle with the required rate of 5%, find the value one share of JFC. Under your assumptions, is JFC undervalued or overvalued in the market?
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter8: Basic Stock Valuation
Section: Chapter Questions
Problem 2P
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Question
You bought 50 shares of Jollibee Food Corp. at Php 25 per share. The
amount of dividend paid during the first period is Php 1.10 per share.
Since JFC performs well in the PSE, you expected that their dividend
payments will grow rate of 3%. Using the dividend valuation principle
with the required rate of 5%, find the value one share of JFC. Under
your assumptions, is JFC undervalued or overvalued in the market?
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