The shares of the company Stu boltar hf . currently selling for USD 1 5 per

 

The shares of the company Stu$ð$boltar hf$.$ currently selling for USD $15$ per share. The return demanded by the shareholders on the company's shares is $12\%.$ Assume that the company will pay a dividend of $4\mathrm{.}5$ USD per share in a year. We expect a fixed rate of dividend payments in perpetuity.

a$)$ What interest rate of dividends is expected?

b$)$ Where can we expect the price of St$ú$dbolta$\text{'}$s shares to be in $4$ years?

 

Answer rating: 100% (QA)

1 a To find the interest rate of dividends expected we can use the dividend discount mode... View the full answer