In year 2008, Janet's firm is using a two stage dividend discount model (DDM) to find the intrinsic value of Smile White Co. Let the risk free interest rate is 4.5% and expected return of market is 14.5% and beta of the Smile White Co. is 1.15. In 2008, dividend per share is $1.72 for the company. Dividends are expected to grow at a rate of 12% per year for the next three years till 2011. After 2011 dividend growth rate will be at constant rate 9% per year indefinitely. A. Calculate the required return by the market for Smile White Co. stock.
B. What was the intrinsic value of Smile White Co. stock when the analyst was evaluating the stock (that is in year 2008)?
Problem 2 (continued)
C. If the price of Smile White Co. was $35.00 at the time of this evaluation process in year 2008, was the stock overpriced or underpriced security considering the intrinsic value obtained by the two-stage DDM. What should be the trading strategy based on the evaluation.

What would you do as ceo to support the goals of japan airlines during the challenging economics that airlines face?

The east asiatic company (eac), a danish company with subsidiaries throughout asia, has been funding its bangkok subsidiary primarily with u.s. dollar debt because of the cost and availability of dollar capital as opposed to thai baht-denominated (b) debt. the treasurer of eac-thailand is considering a 1-year bank loan for $247,000.the current spot rate is b32.03 /$, and the dollar-based interest is 6.78% for the 1-year period. 1-year loans are 12.04% in baht.a. assuming expected inflation rates of 4.3 % and 1.24% in thailand and the united states, respectively, for the coming year, according to purchase power parity, what would the effective cost of funds be in thai baht terms? b. if eac's foreign exchange advisers believe strongly that the thai government wants to push the value of the baht down against the dollar by5% over the coming year (to promote its export competitiveness in dollar markets), what might the effective cost of funds end up being in baht terms? c. if eac could borrow thai baht at 13% per annum, would this be cheaper than either part (a) or part (b) above?

While cell phones with holographic keyboards are currently in the introduction stage of the industry life cycle, tablet computers are in the growth stage. in the context of this scenario, which of the following statements is true? a. the industry for cell phones with holographic keyboards will face greater competition than the tablet industry. b. while the industry for cell phones with holographic keyboards will focus more on product innovation, the tablet industry will focus more on process innovation. c. while the industry for cell phones with holographic keyboards can reap the benefits of economies of scale, the tablet industry will experience no such benefits. d. the industry for cell phones with holographic keyboards will face price competition, whereas, in the tablet industry, the mode of competition will be non-price.