NO.PZ202301100200000204
问题如下：
Based on Exhibit 2, Annear will most likely conclude that the NECP shares are:选项：
A.overvalued according to the two-step DDM and overvalued using AFFO. B.overvalued according to the two-step DDM but undervalued using AFFO. C.undervalued according to the two-step DDM but overvalued using AFFO.解释：
Solution
C is correct. The first step of the DDM uses the estimates for NECP’s dividend in years 1, 2, and 3. In the second step, a long-run dividend growth rate of 3% is assumed. In addition, it is assumed NECP maintains an 80% dividend payout ratio. If NECP’s historical beta is 0.9, the risk-free rate is 3% and the assumed equity risk premium is 4%, the cost of equity capital is 6.6%
Risk free rate +(Beta×Risk premium)=6.6%
The value of the stock at the end of year 3 is 76.25 or
2.7452.745/(6.6% - 3%)
The present values of the cash flows discounted at the cost of capital is:
78.91(1+.036)3 +2.58(1+.036)2 +2.541+.036=69.79
The present value of cash flows according to the two-step DDM is 69.79, compared to which the share price of 62.81 is undervalued. AFFO/share is 3.13 and with a peer multiple of 19, the price is 59.47 compared to which the share price of 62.81 is overvalued.
A is incorrect. NECP is not overvalued when using the two-step DDM.
B is incorrect. NECP is neither overvalued according to the two-step DDM nor undervalued when using AFFO.
是不是只考虑year 1的，那后面年份的数据都是无用的？
