Answer to Question #88263 in Finance for Sabreen Rehana Nisha

Question

Task is to download CCA’s 2017 Annual Report and answer the following questions. Annual Report as in here https://www.ccamatil.com/-/media/Cca/Corporate/Files/Annual-Reports/2018/Annual-Report-2017.ashx

1. What is the average annual dividend growth rate between 2013 and 2017? Hint-use information provided on page 135.

2. Do you think the company will maintain this recent growth rate forever? Justify your answer and if you disagree then also suggest a new dividend growth rate range. Hint-start by reading pages 8-9.

3. Suppose the annual dividend growth rate is 5 percent, which will continue into the foreseeable future. What is the intrinsic value of its share at 31st December 2018, if you require an annual return of 10 percent?

4. What was the share price on 31st December 2018?

5. Should I invest in the company’s shares based on 3 and 4 above? Why or why not?

Answer 1

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