Valuation of Shares of Flight Centre Travel Group Limited - Finance Assignment Help

Assignment Task:

Valuation of shares of Flight Centre Travel Group Limited

Dividend Discount Model

The valuation methods that will be used for valuing the shares of Flight Centre Travel Group Limited are the Dividend Growth Model. This model is based on the underlying assumption that future dividends of the company will grow at a fixed rate for an indefinite period of time. This method is based on the concept that the current value of the shares of the company is based on present value of all future dividends of the company. Another important assumption that this model makes is that the dividend of the company is always more than 0 and the growth rate of dividends cannot be negative. The value of share that is determined using this method is generally a theoretical value as this is based on a lot of assumptions and inputs which may not always be accurate.

The formula that is used at this m model is 

V0 = D1 /(r-g)

Here, 

V0 – the current fair value of a stock

Value per share using the DDM model

By using the DDM model, the current value of each share of the company has been worked out to be $ 24.825 per share. The inputs used for this calculation and details of workings are provided below:

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