QUESTION 2: VALUATION OF COMPANY SHARES
You are required to:
2.1 Estimate the value the following company shares using an appropriate dividend valuation model. The companies are:
(i) Auckland International Airport Ordinary Shares - (AIA)
(ii) Ebos Group Limited Ordinary Shares - (EBO)
(iii) Restaurant Brands New Zealand LimitedOrdinary Shares -(RBD)
(iv) Ryman Healthcare Limited Ordinary Shares - (RYM)
(v) SKYCITY Entertainment Group Limited Ordinary Shares -(SKC)
2.2 Search the web for the current share prices of the above companies (i.e. on the date you completed the assignment question) and explain why there are differences between the actual prices and those computed using dividend valuation models.
To value the above companies, the following tasks need to be carried out:
A. Obtain dividend history
a. Access the following site through the AUT library website (search for finance data bases or directly click on the link below)
NZX Company Research-includes Capital Raisings Database
b. Follow the sequence given below:
== COMPANY SEARCH == "Enter company's code to search (top of page)"
== Dividend History Tool
c. Download dividend history of the company for the period from 2005 to 2013
d. Refer to the column "Nominal Amount Paid" and aggregate interim and final dividends paid for each year (disregard the dates paid).
B. Compute geometric growth rate implied in the dividend history of the above period.
C. Assume dividends paid in 2013 to be the current dividend (d0)
D. Value the company's shares assuming the following costs of equity:
a. AIA = 10%
b. EBO = 9.3%
c. RBD = 15%
d. RYM = 14.85%
e. SKC = 5.5%