Share Valuation of Alpha Company: BAO3403 Assignment Solution

This finance assignment focuses on the valuation of Alpha Company's equity shares using the dividend discount model and free cash flow analysis. The solution begins by estimating the price of an equity share, considering earnings per share, payout ratios, return on equity, and cost of equity capital. It then assesses growth opportunities and determines whether the current share price is over or undervalued. The second part of the assignment involves calculating free cash flow to the firm and free cash flow to equity over a five-year period, along with the value of the firm and the value of equity, considering terminal growth rates and weighted average cost of capital. Finally, it calculates the price per share based on the firm's value and number of equity shares. The assignment demonstrates the application of financial modeling techniques to make informed investment decisions.