Financial Management Report: Share Valuation Analysis, Semester 1

This report provides a comprehensive financial analysis of share valuation, focusing on the application of dividend growth models. The report begins by examining the impact of different dividend growth rates on the share price of Millennium Tutoring. It explores the implications of no growth, constant growth, and non-constant growth models. The analysis reveals that a higher growth rate in dividends and revenue leads to a higher share price, illustrating the sensitivity of share valuation to growth assumptions. The report also highlights how the constant growth model ensures investors of sustained growth, while the non-constant model reflects changes in growth rates over time. The conclusion underscores the importance of growth rates in determining the overall share value and the company's financial performance.

Running head: FINANCIAL MANAGEMENT
Financial Management
Name of the Student:
Name of the University:
Authors Note:

FINANCIAL MANAGEMENT
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Table of Contents
Part A: Valuing Shares...............................................................................................................2
Answer to a:...............................................................................................................................2
Answer to b:...............................................................................................................................2
Answer to c:...............................................................................................................................2
Answer to d:...............................................................................................................................3
References:.................................................................................................................................4

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Part A: Valuing Shares
Answer to a:
Answer to b:
Answer to c:

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Answer to d:
The valuation of Millennium Tutoring has relevantly changed with the alternation in
the dividend rate. The changes in the relevant rate have mainly indicated that the
organization’s overall share price values mainly changes with higher growth rate conditions.
The no growth rate value has mainly depicted a share price value of only $12.50, where the
anticipation of no growth rate is conducted. This mainly indicates that the company’s overall
performance will not grow with its revenue and dividend payments. Hence, the valuation of
the company is relevantly lower and stops are $12.50. On the other hand, the increment in
growth rate with constant values has different impact on the company’s performance, which
increases both their revenue and dividends (Kiselakova et al. 2015). Therefore, the share
value of Millennium Tutoring will pertinently increase to the levels of $16.93, as relevant
growth in dividends and revenue is anticipated by the investors. The constant growth rate
model relevantly ensures the investor of a higher growth rate that will be achieved from the
operations, which supports the dividend growth model and increases the value of the share
regardless of the decline in the dividend payout ratio.
The share price performance of Millennium Tutoring relevantly increases with the
introduction of non-constant growth rate model. This model directly ensures a higher growth
rate in revenues and dividend payments that would be conducted by Millennium Tutoring in
future years. In addition, the growth rate relevantly changes two-time until it becomes
constant (Matthew 2017). This increment in growth rate of revenue and dividend directly
derives the prices of Millennium Tutoring shares.

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References:
Kiselakova, D., Horvathova, J., Sofrankova, B. and Soltes, M., 2015. Analysis of risks and
their impact on enterprise performance by creating Enterprise Risk Model. Polish Journal of
Management Studies, 11.
Matthew, B.T., 2017. Financial management in the sport industry. Routledge.