Valuation of Adelaide Brighton Limited Stock using CAPM and Dividend Discount Model

Running head: REPORT 0
Financial Strategy & Governance
APRIL 16, 2019
STUDENT DETAILS:

REPORT 1
Contents
Introduction................................................................................................................................2
Overview of company................................................................................................................2
Operations, risks, and return characteristics of company......................................................2
Stock Valuation Methods...........................................................................................................3
Two-stage Dividend Discount Model...................................................................................4
PE Multiple Model..................................................................................................................7
Limitations of models................................................................................................................7
Assumptions in data..................................................................................................................8
Qualitative or practical considerations influencing valuation.................................................8
Conclusion..................................................................................................................................9
References................................................................................................................................10

REPORT 2

REPORT 3
Introduction
At the time, while the buyer and seller trade the stocks, then they decide the stock’s value by
the price of the stock at the time of trading. The stock’s value is depended on the
corporation’s status, involving the management, earning potential in future and capital
structure. In the following parts, the stock of Adelaide Brighton Limited is valued by using
the combination of conventional valuation models like CAPM for equity return estimate,
two-stage dividend discount model, and multiples-based (P/E) and fundamental research
resources.
Overview of company
Adelaide Brighton Limited is the producer and vendor of cement, products related to cement,
olive, premixed materials, aggregates sand and solid product. Adelaide Brighton Limited runs
by 2 segments. One is Concrete Products. Other is cement, olive, concrete and aggregates.
This has facilities related to manufacturing of Cement in Western and Southern Australia, and
industrial olive manufacturing assets in Northern territory, Southern and Western Australia.
This corporation provides the concrete brick, block, retaining wall, erosion controlling
product, architectural masonry and reconstituted stone veneers by the places in Victoria,
Queensland, NSW, Southern Australia and Tasmania. The main end-use marketplaces of the
products related to company involve the inhabited structure and non-inhabited structure,
manufacturing construction, industrial construction, alumina and manufacturing of steel and
mines.