A fast growth share has the first dividend (t=1) of $3.19. Dividends are then expected to...
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A fast growth share has the first dividend (t=1) of $3.19. Dividends are then expected to grow at a rate of 9 percent p.a. for a further 3 years. It then will settle to a constant-growth rate of 2.9 percent. . If the required rate of return is 18 percent, what is the current price of the share? (to the nearest cent) a. $64.93 b. $21.13 c. $21.57 d. $24.16 A fast growth share has the first dividend (t=1) of $3.19. Dividends are then expected to grow at a rate of 9 percent p.a. for a further 3 years. It then will settle to a constant-growth rate of 2.9 percent. . If the required rate of return is 18 percent, what is the current price of the share? (to the nearest cent) a. $64.93 b. $21.13 c. $21.57 d. $24.16
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The correct answer is a 6493 This can be calculated using the Gordon Growth Model GGMwhich is used t... View the full answer
Related Book For
Financial Reporting Financial Statement Analysis and Valuation
ISBN: 978-0324302950
6th edition
Authors: Clyde P. Stickney
Posted Date:
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