Financial Management

In chapter 9 of the textbook you learned about constant dividend model for valuation of a company’s stock. However, in certain industries, many companies do not pay dividends.

1        Discuss in which industries most companies do not pay dividend and why?

2        Which factors do you consider in order to value the stock of a company that does not pay dividend and how would you value the stock?

3        Select two publicly traded companies from two different industries and discuss how you would value the stock of those companies. Are your selected stocks overpriced or underpriced by the market?