Belmont plc pays an annual dividend subject to constant growth of 8% for the next 5 years,
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Question:
Belmont plc pays an annual dividend subject to constant growth of 8% for the next 5 years, but is then expected to stay at this level indefinitely. Last year’s dividend paid was 10p. Using the dividend valuation model and assuming the required rate of return of ordinary shareholders is 15%, the price of Belmont shares is:-
A.
80p
B.
90p
C.
10p
D.
50p
Related Book For
Engineering Economic Analysis
ISBN: 9780195168075
9th Edition
Authors: Donald Newnan, Ted Eschanbach, Jerome Lavelle
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