STOCK VALUATION ASSIGNMENT
1.
A technical analyst has been following the NSE 20 Share Index and has observed
the following daily closings:
Day
NSE 20 Share
Index
Day
NSE 20 Share
Index
1
2,010
7
2,220
2
2,100
8
2,130
3
2,165
9
2,250
4
2,080
10
2,315
5
2,070
11
2,240
6
2,150
12
2,310
Based on a 4-day moving average, if the index closed at 2,300 on day 13 would it
signal a buy or sell decision? Explain. (5mks)
2.
Zee Limited has a current dividend of Ksh1.75 a share. The following are the
expected annual growth rates for dividends.
Dividend Year
Growth Rate
1-3
22
4-6
17
7-9
12
10 onwards
10
The required rate of return for the stock (the company’s cost of equity) is 12
percent. What is the value of the company Stock? (5mks)