A company has in issue 4% irredeemable debt. The debt is trading at 80% and the...
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A company has in issue 4% irredeemable debt. The debt is trading at £80% and the next interest payment is due in 1 year. What is the required return of the debt holders? (5%) A company's past dividend history is set out below. Calculate the average percentage annual growth rate in dividend per share. (5.2%) Year ended 20x7 20x6 20x5 20x4 20x3 20x2 Dividend per share (pence) 16.76 15.73 15.05 14.39 12.79 13.00 Use the Gordon growth model to estimate the future growth rate in the annual dividend of the company below, assuming that the company's retention rate and the return achieved on new investment will remain the same as in the past. (About 0.06) Compare it with the past average growth rate in dividends. (0.05) Profits after tax Retained profit Dividend Share capital + reserves: Y/e 20x3 20x4 20x5 20x6 £'000 £'000 £'000 2,400 2,832 2,662 2,834 £'000 1,652 2,136 1,796 2,251 748 696 866 583 20x7 £'000 3,141 2,231 910 b/f 29,000 30,652 32,788 34,584 36,835 c/f 30,652 32,788 34,584 36,835 39,066 A company has in issue 4% irredeemable debt. The debt is trading at £80% and the next interest payment is due in 1 year. What is the required return of the debt holders? (5%) A company's past dividend history is set out below. Calculate the average percentage annual growth rate in dividend per share. (5.2%) Year ended 20x7 20x6 20x5 20x4 20x3 20x2 Dividend per share (pence) 16.76 15.73 15.05 14.39 12.79 13.00 Use the Gordon growth model to estimate the future growth rate in the annual dividend of the company below, assuming that the company's retention rate and the return achieved on new investment will remain the same as in the past. (About 0.06) Compare it with the past average growth rate in dividends. (0.05) Profits after tax Retained profit Dividend Share capital + reserves: Y/e 20x3 20x4 20x5 20x6 £'000 £'000 £'000 2,400 2,832 2,662 2,834 £'000 1,652 2,136 1,796 2,251 748 696 866 583 20x7 £'000 3,141 2,231 910 b/f 29,000 30,652 32,788 34,584 36,835 c/f 30,652 32,788 34,584 36,835 39,066
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Related Book For
Advanced Accounting
ISBN: 978-0538480284
11th edition
Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Posted Date:
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