A new firm's share is expected to pay cash dividends of $0.50 at the end of...

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A new firm's share is expected to pay cash dividends of $0.50 at the end of its first year of business, $0.75 at the end of the second and third year, $1.00 at the end of years four and five, and $1.25 beginning in year six and for each year thereafter for the foreseeable future. If the required rate of return is 14%, what is the approximate current market value of this firm's ordinary shares? A new firm's share is expected to pay cash dividends of $0.50 at the end of its first year of business, $0.75 at the end of the second and third year, $1.00 at the end of years four and five, and $1.25 beginning in year six and for each year thereafter for the foreseeable future. If the required rate of return is 14%, what is the approximate current market value of this firm's ordinary shares?

Answer rating: 100% (QA)

To calculate the approximate current market value of the firms ordinary shares we can use the divide... View the full answer