A new company, Smith Ltd, plans to start paying dividends in 6 years time. This first dividend will be $0.50, and thereafter the dividends will increase by 2.5% each year indefinitely. If the required return is 12%, what is the price of a share today?

Answer rating: 100% (QA)

To calculate the price of a share today using the dividend discount model DDM without a ta... View the full answer