Advances in Economics, Management and Political Sciences
- The Open Access Proceedings Series for Conferences
Series Vol. 60 , 05 January 2024
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Stocks, as a security in economic life and widely chosen by investors. The decision-making process of whether to allocate capital to stocks or not necessitates the employment of analytical methodologies, prominently including the assessment. This study employed, the 2-stage Dividend Discount Model, a classic model in stock price evaluations. Mitsubishi Heavy Industries, Ltd. (MHI) was selected as an example, on the basis of fundamental financial data and fundamental market information, the case study will determine the intrinsic value of MHI's shares. The analysis proffers that MHI’s stock exhibits an undervaluation, warranting investors to consider a strategic position of acquisition and retention until equity valuations converge or above the intrinsic worth. In addition, the study simultaneously discusses the issues that need to be taken into account when using the model and analyses the problems with the model itself. The research also emphasizes the need to consider these findings alongside other factors, and additional valuation models for more accurate investment decision-making.
2-stage Dividend Discount Model, intrinsic value, Capital Assets Pricing Model, Mitsubishi Heavy Industries, Ltd. (MHI)
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The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
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