Calculate the required return and the present value for both shares would you place on each share. Furthermore, assume that Sharp Ltds dividend has grown from$0.50 to $0.58 in the last 5 years and Blunt Ltds dividend has increased from $1.10 to $1.34 over the last 5 years. The last observed 10-years government bond yield was 2%. What concerns does the research raise in regards to dividend valuation models?

- fx Month B D E F F G H J K L M Sharp Itd Return % Blunt Ltd($) Blunt Ltd return % Portfolio Return % RETURNS MONTHS 1 0.65% Share Share Market Market index (points) Return % 6790 6845 0.81% 6890 0.66% 6935 0.65% 7000 0.94% 6975 -0.36% 7015 0.57% 7135 1.71% 7070 -0.91% 7200 1.84% Sharp Ltd ($) 7.75 7.8 8.05 8.2 8.65 9.35 2 3 14 18.1 18.25 18.5 18.4 18.75 19.1 18.6 18.85 19.2 19.55 3.21% 1.86% 5.49% 8.09% 4.81% 5.10% 2.91% -0.94% 0.83% 1.37% -0.54% 1.90% 1.87% -2.62% 1.34% 1.86% 1.82% 0.74% 2.29% 0.66% 3.69% 4.98% 1.10% 3.22% 2.38% 0.44% 15 6 7 9.8 10.3 10.6 10.5 8 9 2.38% 19.7 10 11 19.35 19.7 20 20.25 12. PREDICTION OF INTERVALS Share Market Sharp Itd Blunt Ltd Return % Return % return % 6.61% 31.31% 8.63% 4.60% 20.19% 8.25% 6.31% -2.49% 15.10% 5.80% 5.23% 6.38% 4.20% 5.27% 3.14% YEAR 1 (1-12) YEAR 2 (13-24) YEAR 3 (25-36) YEAR 4 (37-48) YEAR 5 (49-60) 13 14 20.5 15 16 17 5.50% 11.90% 8.30% 18 7345 7140 7245 7440 7560 7390 7210 7375 7490 7600 7490 7385 7500 7655 7570 7595 7610 7635 2.01% -2.79% 1.47% 2.69% 1.61% -2.25% -2.44% 2.29% 1.56% 1.47% -1.45% -1.40% 1.56% 2.07% -1.11% 0.33% 0.20% % 0.33% 10.75 10.3 10.5 10.9 11.4 11.7 12.1 12 12.4 12.6 12.1 11.45 12 12.35 12.75 11.9 12 12.1 -4.19% 1.94% 3.81% 4.59% 2.63% 3.42% -0.83% 3.33% 1.61% -3.97% -5.37% 4.80% 2.92% 3.24% -6.67% 0.84% 0.83% 0.77% -1.78% 1.81% 1.52% 1.25% 1.23% 2.44% 2.38% 2.33% 2.27% 1.78% -2.62% -5.38% 3.79% -2.74% 3.52% 0.68% 3.15% 1.57% -2.98% 1.88% 2.67% 2.92% 1.93% 2.93% 0.78% 2.83% 1.94% -1.10% -4.00% -0.29% 3.35% 0.25% -1.57% 0.76% 1.99% AVARAGE OF ANNUAL RETURNS ANNUAL STAND DEV 1.06% 21 21.5 22 22.5 22.9 22.3 21.1 21.9 21.3 22.05 22.2 22.9 13.61% 4.38% 19 20 21 22 23 3.39% 7.61% -15.32% 39.13% -0.46% 17.06% PREDICTIONS 24 25 26 27 + Sheet1 Copy of Sheet1 - PA WE