A company has issued 9 million ordinary shares. The company has just paid a dividend of...
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A company has issued 9 million ordinary shares. The company has just paid a dividend of $4.4 million. That dividend is expected to grow at a rate of 27 percent per annum for the next two years, then at a rate of 17 percent in the following next three years and at a rate of 4.31 percent per annum forever after that. Assuming a required rate of return of 13.82 percent, calculate the intrinsic value of the share. A company has issued 9 million ordinary shares. The company has just paid a dividend of $4.4 million. That dividend is expected to grow at a rate of 27 percent per annum for the next two years, then at a rate of 17 percent in the following next three years and at a rate of 4.31 percent per annum forever after that. Assuming a required rate of return of 13.82 percent, calculate the intrinsic value of the share.
Expert Answer:
Answer rating: 100% (QA)
Certainly To calculate the intrinsic value of the share we can use the dividend discount model DDM T... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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